Correlation Between ASTRA INTERNATIONAL and MOLSON RS
Can any of the company-specific risk be diversified away by investing in both ASTRA INTERNATIONAL and MOLSON RS 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 ASTRA INTERNATIONAL and MOLSON RS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ASTRA INTERNATIONAL and MOLSON RS BEVERAGE, you can compare the effects of market volatilities on ASTRA INTERNATIONAL and MOLSON RS 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 ASTRA INTERNATIONAL with a short position of MOLSON RS. Check out your portfolio center. Please also check ongoing floating volatility patterns of ASTRA INTERNATIONAL and MOLSON RS.
Diversification Opportunities for ASTRA INTERNATIONAL and MOLSON RS
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between ASTRA and MOLSON is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding ASTRA INTERNATIONAL and MOLSON RS BEVERAGE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MOLSON RS BEVERAGE and ASTRA INTERNATIONAL 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 ASTRA INTERNATIONAL are associated (or correlated) with MOLSON RS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MOLSON RS BEVERAGE has no effect on the direction of ASTRA INTERNATIONAL i.e., ASTRA INTERNATIONAL and MOLSON RS go up and down completely randomly.
Pair Corralation between ASTRA INTERNATIONAL and MOLSON RS
Assuming the 90 days trading horizon ASTRA INTERNATIONAL is expected to generate 1.02 times more return on investment than MOLSON RS. However, ASTRA INTERNATIONAL is 1.02 times more volatile than MOLSON RS BEVERAGE. It trades about 0.22 of its potential returns per unit of risk. MOLSON RS BEVERAGE is currently generating about 0.06 per unit of risk. If you would invest 28.00 in ASTRA INTERNATIONAL on September 13, 2024 and sell it today you would earn a total of 2.00 from holding ASTRA INTERNATIONAL or generate 7.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ASTRA INTERNATIONAL vs. MOLSON RS BEVERAGE
Performance |
| Timeline |
| ASTRA INTERNATIONAL |
| MOLSON RS BEVERAGE |
ASTRA INTERNATIONAL and MOLSON RS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ASTRA INTERNATIONAL and MOLSON RS
The main advantage of trading using opposite ASTRA INTERNATIONAL and MOLSON RS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ASTRA INTERNATIONAL position performs unexpectedly, MOLSON RS 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 MOLSON RS will offset losses from the drop in MOLSON RS's long position.| ASTRA INTERNATIONAL vs. Apple Inc | ASTRA INTERNATIONAL vs. Apple Inc | ASTRA INTERNATIONAL vs. Apple Inc | ASTRA INTERNATIONAL vs. Apple Inc |
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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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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