Correlation Between Astera Labs, and GM
Can any of the company-specific risk be diversified away by investing in both Astera Labs, and GM 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 GM 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 General Motors, you can compare the effects of market volatilities on Astera Labs, and GM 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 GM. Check out your portfolio center. Please also check ongoing floating volatility patterns of Astera Labs, and GM.
Diversification Opportunities for Astera Labs, and GM
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Astera and GM is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Astera Labs, Common and General Motors in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on General Motors 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 GM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of General Motors has no effect on the direction of Astera Labs, i.e., Astera Labs, and GM go up and down completely randomly.
Pair Corralation between Astera Labs, and GM
Given the investment horizon of 90 days Astera Labs, Common is expected to generate 2.64 times more return on investment than GM. However, Astera Labs, is 2.64 times more volatile than General Motors. It trades about 0.08 of its potential returns per unit of risk. General Motors is currently generating about 0.12 per unit of risk. If you would invest 6,889 in Astera Labs, Common on August 25, 2024 and sell it today you would earn a total of 3,339 from holding Astera Labs, Common or generate 48.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Astera Labs, Common vs. General Motors
Performance |
| Timeline |
| Astera Labs, Common |
| General Motors |
Astera Labs, and GM Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Astera Labs, and GM
The main advantage of trading using opposite Astera Labs, and GM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Astera Labs, position performs unexpectedly, GM 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 GM will offset losses from the drop in GM's long position.| Astera Labs, vs. Precision Drilling | Astera Labs, vs. Cabo Drilling Corp | Astera Labs, vs. MGIC Investment Corp | Astera Labs, vs. CT Real Estate |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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