Correlation Between Astoria Investments and Shoprite Holdings
Can any of the company-specific risk be diversified away by investing in both Astoria Investments and Shoprite Holdings 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 Shoprite Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Astoria Investments and Shoprite Holdings, you can compare the effects of market volatilities on Astoria Investments and Shoprite Holdings 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 Shoprite Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Astoria Investments and Shoprite Holdings.
Diversification Opportunities for Astoria Investments and Shoprite Holdings
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Astoria and Shoprite is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Astoria Investments and Shoprite Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shoprite Holdings 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 Shoprite Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shoprite Holdings has no effect on the direction of Astoria Investments i.e., Astoria Investments and Shoprite Holdings go up and down completely randomly.
Pair Corralation between Astoria Investments and Shoprite Holdings
Assuming the 90 days trading horizon Astoria Investments is expected to under-perform the Shoprite Holdings. But the stock apears to be less risky and, when comparing its historical volatility, Astoria Investments is 1.2 times less risky than Shoprite Holdings. The stock trades about -0.21 of its potential returns per unit of risk. The Shoprite Holdings is currently generating about -0.08 of returns per unit of risk over similar time horizon. If you would invest 3,031,400 in Shoprite Holdings on September 1, 2024 and sell it today you would lose (73,500) from holding Shoprite Holdings or give up 2.42% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Astoria Investments vs. Shoprite Holdings
Performance |
| Timeline |
| Astoria Investments |
| Shoprite Holdings |
Astoria Investments and Shoprite Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Astoria Investments and Shoprite Holdings
The main advantage of trading using opposite Astoria Investments and Shoprite Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Astoria Investments position performs unexpectedly, Shoprite Holdings 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 Shoprite Holdings will offset losses from the drop in Shoprite Holdings' long position.| Astoria Investments vs. Reinet Investments SCA | Astoria Investments vs. Zeder Investments | Astoria Investments vs. Sabvest Capital | Astoria Investments vs. Universal Partners |
| Shoprite Holdings vs. CA Sales Holdings | Shoprite Holdings vs. Afine Investments | Shoprite Holdings vs. We Buy Cars | Shoprite Holdings vs. Allied Electronics |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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