Correlation Between Asara Resources and Actinogen Medical
Can any of the company-specific risk be diversified away by investing in both Asara Resources and Actinogen Medical 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 Asara Resources and Actinogen Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Asara Resources and Actinogen Medical, you can compare the effects of market volatilities on Asara Resources and Actinogen Medical 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 Asara Resources with a short position of Actinogen Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Asara Resources and Actinogen Medical.
Diversification Opportunities for Asara Resources and Actinogen Medical
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Asara and Actinogen is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Asara Resources and Actinogen Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Actinogen Medical and Asara Resources 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 Asara Resources are associated (or correlated) with Actinogen Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Actinogen Medical has no effect on the direction of Asara Resources i.e., Asara Resources and Actinogen Medical go up and down completely randomly.
Pair Corralation between Asara Resources and Actinogen Medical
Assuming the 90 days trading horizon Asara Resources is expected to generate 2.08 times less return on investment than Actinogen Medical. But when comparing it to its historical volatility, Asara Resources is 1.27 times less risky than Actinogen Medical. It trades about 0.02 of its potential returns per unit of risk. Actinogen Medical is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 3.94 in Actinogen Medical on August 28, 2024 and sell it today you would lose (1.44) from holding Actinogen Medical or give up 36.55% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Asara Resources vs. Actinogen Medical
Performance |
| Timeline |
| Asara Resources |
| Actinogen Medical |
Asara Resources and Actinogen Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Asara Resources and Actinogen Medical
The main advantage of trading using opposite Asara Resources and Actinogen Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asara Resources position performs unexpectedly, Actinogen Medical 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 Actinogen Medical will offset losses from the drop in Actinogen Medical's long position.| Asara Resources vs. Audio Pixels Holdings | Asara Resources vs. Norwest Minerals | Asara Resources vs. Lindian Resources | Asara Resources vs. Resource Base |
| Actinogen Medical vs. Aneka Tambang Tbk | Actinogen Medical vs. Rio Tinto | Actinogen Medical vs. BHP Group Limited | Actinogen Medical vs. Block Inc |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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