Correlation Between Astera Labs, and Cathay Pacific
Can any of the company-specific risk be diversified away by investing in both Astera Labs, and Cathay Pacific 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 Astera Labs, and Cathay Pacific into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Astera Labs, Common and Cathay Pacific Airways, you can compare the effects of market volatilities on Astera Labs, and Cathay Pacific 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 Astera Labs, with a short position of Cathay Pacific. Check out your portfolio center. Please also check ongoing floating volatility patterns of Astera Labs, and Cathay Pacific.
Diversification Opportunities for Astera Labs, and Cathay Pacific
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Astera and Cathay is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Astera Labs, Common and Cathay Pacific Airways in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cathay Pacific Airways and Astera Labs, 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 Astera Labs, Common are associated (or correlated) with Cathay Pacific. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cathay Pacific Airways has no effect on the direction of Astera Labs, i.e., Astera Labs, and Cathay Pacific go up and down completely randomly.
Pair Corralation between Astera Labs, and Cathay Pacific
Given the investment horizon of 90 days Astera Labs, Common is expected to generate 5.49 times more return on investment than Cathay Pacific. However, Astera Labs, is 5.49 times more volatile than Cathay Pacific Airways. It trades about 0.24 of its potential returns per unit of risk. Cathay Pacific Airways is currently generating about 0.46 per unit of risk. If you would invest 7,016 in Astera Labs, Common on September 1, 2024 and sell it today you would earn a total of 3,309 from holding Astera Labs, Common or generate 47.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Astera Labs, Common vs. Cathay Pacific Airways
Performance |
| Timeline |
| Astera Labs, Common |
| Cathay Pacific Airways |
Astera Labs, and Cathay Pacific Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Astera Labs, and Cathay Pacific
The main advantage of trading using opposite Astera Labs, and Cathay Pacific positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Astera Labs, position performs unexpectedly, Cathay Pacific 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 Cathay Pacific will offset losses from the drop in Cathay Pacific's long position.| Astera Labs, vs. Fast Retailing Co | Astera Labs, vs. Weibo Corp | Astera Labs, vs. Valvoline | Astera Labs, vs. Sea |
| Cathay Pacific vs. Singapore Airlines | Cathay Pacific vs. International Consolidated Airlines | Cathay Pacific vs. Air France KLM | Cathay Pacific vs. Qantas Airways Ltd |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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