Correlation Between ASTRA INTERNATIONAL and SIMCERE PHARMAC
Can any of the company-specific risk be diversified away by investing in both ASTRA INTERNATIONAL and SIMCERE PHARMAC 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 SIMCERE PHARMAC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ASTRA INTERNATIONAL and SIMCERE PHARMAC GRP, you can compare the effects of market volatilities on ASTRA INTERNATIONAL and SIMCERE PHARMAC 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 SIMCERE PHARMAC. Check out your portfolio center. Please also check ongoing floating volatility patterns of ASTRA INTERNATIONAL and SIMCERE PHARMAC.
Diversification Opportunities for ASTRA INTERNATIONAL and SIMCERE PHARMAC
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ASTRA and SIMCERE is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding ASTRA INTERNATIONAL and SIMCERE PHARMAC GRP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SIMCERE PHARMAC GRP 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 SIMCERE PHARMAC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SIMCERE PHARMAC GRP has no effect on the direction of ASTRA INTERNATIONAL i.e., ASTRA INTERNATIONAL and SIMCERE PHARMAC go up and down completely randomly.
Pair Corralation between ASTRA INTERNATIONAL and SIMCERE PHARMAC
Assuming the 90 days trading horizon ASTRA INTERNATIONAL is expected to generate 2.79 times less return on investment than SIMCERE PHARMAC. In addition to that, ASTRA INTERNATIONAL is 1.42 times more volatile than SIMCERE PHARMAC GRP. It trades about 0.01 of its total potential returns per unit of risk. SIMCERE PHARMAC GRP is currently generating about 0.04 per unit of volatility. If you would invest 66.00 in SIMCERE PHARMAC GRP on November 29, 2024 and sell it today you would earn a total of 36.00 from holding SIMCERE PHARMAC GRP or generate 54.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
ASTRA INTERNATIONAL vs. SIMCERE PHARMAC GRP
Performance |
| Timeline |
| ASTRA INTERNATIONAL |
| SIMCERE PHARMAC GRP |
ASTRA INTERNATIONAL and SIMCERE PHARMAC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ASTRA INTERNATIONAL and SIMCERE PHARMAC
The main advantage of trading using opposite ASTRA INTERNATIONAL and SIMCERE PHARMAC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ASTRA INTERNATIONAL position performs unexpectedly, SIMCERE PHARMAC 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 SIMCERE PHARMAC will offset losses from the drop in SIMCERE PHARMAC's long position.| ASTRA INTERNATIONAL vs. Fast Retailing Co | ASTRA INTERNATIONAL vs. Alfa Financial Software | ASTRA INTERNATIONAL vs. COSTCO WHOLESALE CDR | ASTRA INTERNATIONAL vs. National Retail Properties |
| SIMCERE PHARMAC vs. Merck KGaA | SIMCERE PHARMAC vs. Haleon PLC | SIMCERE PHARMAC vs. LIVZON PHARMAC GRP | SIMCERE PHARMAC vs. CanSino Biologics |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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