Correlation Between Vision Energy and Astra Energy

Can any of the company-specific risk be diversified away by investing in both Vision Energy and Astra Energy at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Vision Energy and Astra Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Vision Energy Corp and Astra Energy, you can compare the effects of market volatilities on Vision Energy and Astra Energy and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Vision Energy with a short position of Astra Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vision Energy and Astra Energy.

Diversification Opportunities for Vision Energy and Astra Energy

0.36

Correlation Coefficient

Vision Energy  Astra Energy

Weak diversification

The 3 months correlation between Vision and Astra is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Vision Energy Corp and Astra Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Astra Energy and Vision Energy is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Vision Energy Corp are associated (or correlated) with Astra Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Astra Energy has no effect on the direction of Vision Energy i.e., Vision Energy and Astra Energy go up and down completely randomly.

Pair Corralation between Vision Energy and Astra Energy

Given the investment horizon of 90 days Vision Energy Corp is expected to generate 22.44 times more return on investment than Astra Energy. However, Vision Energy is 22.44 times more volatile than Astra Energy. It trades about 0.27 of its potential returns per unit of risk. Astra Energy is currently generating about -0.04 per unit of risk. If you would invest  0.10  in Vision Energy Corp on September 28, 2024 and sell it today you would lose (0.09) from holding Vision Energy Corp or give up 90.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.44%
Values	Daily Returns

Vision Energy Corp  vs.  Astra Energy

Vision Energy Corp

Risk-Adjusted Performance

21 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Vision Energy Corp are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. Despite nearly abnormal basic indicators, Vision Energy reported solid returns over the last few months and may actually be approaching a breakup point.

Astra Energy

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Astra Energy has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Vision Energy and Astra Energy

The main advantage of trading using opposite Vision Energy and Astra Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vision Energy position performs unexpectedly, Astra Energy can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Astra Energy will offset losses from the drop in Astra Energy's long position.

The idea behind Vision Energy Corp and Astra Energy pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.