Correlation Between AC SA and Astarta Holding
Can any of the company-specific risk be diversified away by investing in both AC SA and Astarta Holding 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 AC SA and Astarta Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AC SA and Astarta Holding NV, you can compare the effects of market volatilities on AC SA and Astarta Holding 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 AC SA with a short position of Astarta Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of AC SA and Astarta Holding.
Diversification Opportunities for AC SA and Astarta Holding
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between ACG and Astarta is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding AC SA and Astarta Holding NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Astarta Holding NV and AC SA 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 AC SA are associated (or correlated) with Astarta Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Astarta Holding NV has no effect on the direction of AC SA i.e., AC SA and Astarta Holding go up and down completely randomly.
Pair Corralation between AC SA and Astarta Holding
Assuming the 90 days trading horizon AC SA is expected to generate 0.51 times more return on investment than Astarta Holding. However, AC SA is 1.96 times less risky than Astarta Holding. It trades about 0.19 of its potential returns per unit of risk. Astarta Holding NV is currently generating about 0.09 per unit of risk. If you would invest 3,000 in AC SA on October 21, 2024 and sell it today you would earn a total of 100.00 from holding AC SA or generate 3.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
AC SA vs. Astarta Holding NV
Performance |
| Timeline |
| AC SA |
| Astarta Holding NV |
AC SA and Astarta Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AC SA and Astarta Holding
The main advantage of trading using opposite AC SA and Astarta Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AC SA position performs unexpectedly, Astarta Holding 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 Astarta Holding will offset losses from the drop in Astarta Holding's long position.The idea behind AC SA and Astarta Holding NV 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.| Astarta Holding vs. Agroton Public | Astarta Holding vs. Tauron Polska Energia | Astarta Holding vs. Agroliga Group PLC | Astarta Holding vs. AC SA |
Check out your portfolio center.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 Global Correlations module to find global opportunities by holding instruments from different markets.
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