Correlation Between Astoria Investments and Master Drilling
Can any of the company-specific risk be diversified away by investing in both Astoria Investments and Master Drilling 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 Astoria Investments and Master Drilling into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Astoria Investments and Master Drilling Group, you can compare the effects of market volatilities on Astoria Investments and Master Drilling 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 Astoria Investments with a short position of Master Drilling. Check out your portfolio center. Please also check ongoing floating volatility patterns of Astoria Investments and Master Drilling.
Diversification Opportunities for Astoria Investments and Master Drilling
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Astoria and Master is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Astoria Investments and Master Drilling Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Master Drilling Group and Astoria Investments 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 Astoria Investments are associated (or correlated) with Master Drilling. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Master Drilling Group has no effect on the direction of Astoria Investments i.e., Astoria Investments and Master Drilling go up and down completely randomly.
Pair Corralation between Astoria Investments and Master Drilling
Assuming the 90 days trading horizon Astoria Investments is expected to generate 1.13 times more return on investment than Master Drilling. However, Astoria Investments is 1.13 times more volatile than Master Drilling Group. It trades about 0.05 of its potential returns per unit of risk. Master Drilling Group is currently generating about 0.01 per unit of risk. If you would invest 81,000 in Astoria Investments on August 31, 2024 and sell it today you would earn a total of 1,500 from holding Astoria Investments or generate 1.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Astoria Investments vs. Master Drilling Group
Performance |
| Timeline |
| Astoria Investments |
| Master Drilling Group |
Astoria Investments and Master Drilling Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Astoria Investments and Master Drilling
The main advantage of trading using opposite Astoria Investments and Master Drilling positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Astoria Investments position performs unexpectedly, Master Drilling 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 Master Drilling will offset losses from the drop in Master Drilling's long position.| Astoria Investments vs. Reinet Investments SCA | Astoria Investments vs. Zeder Investments | Astoria Investments vs. Sabvest Capital | Astoria Investments vs. Universal Partners |
| Master Drilling vs. Kumba Iron Ore | Master Drilling vs. Astral Foods | Master Drilling vs. Frontier Transport Holdings | Master Drilling vs. CA Sales Holdings |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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