Correlation Between Aspen Pharmacare and Astoria Investments
Can any of the company-specific risk be diversified away by investing in both Aspen Pharmacare and Astoria Investments 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 Aspen Pharmacare and Astoria Investments into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Aspen Pharmacare Holdings and Astoria Investments, you can compare the effects of market volatilities on Aspen Pharmacare and Astoria Investments 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 Aspen Pharmacare with a short position of Astoria Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aspen Pharmacare and Astoria Investments.
Diversification Opportunities for Aspen Pharmacare and Astoria Investments
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Aspen and Astoria is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Aspen Pharmacare Holdings and Astoria Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Astoria Investments and Aspen Pharmacare 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 Aspen Pharmacare Holdings are associated (or correlated) with Astoria Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Astoria Investments has no effect on the direction of Aspen Pharmacare i.e., Aspen Pharmacare and Astoria Investments go up and down completely randomly.
Pair Corralation between Aspen Pharmacare and Astoria Investments
Assuming the 90 days trading horizon Aspen Pharmacare Holdings is expected to under-perform the Astoria Investments. But the stock apears to be less risky and, when comparing its historical volatility, Aspen Pharmacare Holdings is 2.9 times less risky than Astoria Investments. The stock trades about -0.49 of its potential returns per unit of risk. The Astoria Investments is currently generating about -0.08 of returns per unit of risk over similar time horizon. If you would invest 86,500 in Astoria Investments on August 28, 2024 and sell it today you would lose (4,000) from holding Astoria Investments or give up 4.62% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aspen Pharmacare Holdings vs. Astoria Investments
Performance |
| Timeline |
| Aspen Pharmacare Holdings |
| Astoria Investments |
Aspen Pharmacare and Astoria Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aspen Pharmacare and Astoria Investments
The main advantage of trading using opposite Aspen Pharmacare and Astoria Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aspen Pharmacare position performs unexpectedly, Astoria Investments 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 Astoria Investments will offset losses from the drop in Astoria Investments' long position.| Aspen Pharmacare vs. RCL Foods | Aspen Pharmacare vs. Advtech | Aspen Pharmacare vs. Allied Electronics | Aspen Pharmacare vs. British American Tobacco |
| Astoria Investments vs. eMedia Holdings Limited | Astoria Investments vs. RCL Foods | Astoria Investments vs. CA Sales Holdings | Astoria Investments vs. Harmony Gold Mining |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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