Correlation Between ASTRA INTERNATIONAL and Square
Can any of the company-specific risk be diversified away by investing in both ASTRA INTERNATIONAL and Square 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 Square into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ASTRA INTERNATIONAL and Square Inc, you can compare the effects of market volatilities on ASTRA INTERNATIONAL and Square 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 Square. Check out your portfolio center. Please also check ongoing floating volatility patterns of ASTRA INTERNATIONAL and Square.
Diversification Opportunities for ASTRA INTERNATIONAL and Square
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ASTRA and Square is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding ASTRA INTERNATIONAL and Square Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Square Inc 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 Square. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Square Inc has no effect on the direction of ASTRA INTERNATIONAL i.e., ASTRA INTERNATIONAL and Square go up and down completely randomly.
Pair Corralation between ASTRA INTERNATIONAL and Square
Assuming the 90 days trading horizon ASTRA INTERNATIONAL is expected to generate 2.92 times less return on investment than Square. In addition to that, ASTRA INTERNATIONAL is 1.63 times more volatile than Square Inc. It trades about 0.06 of its total potential returns per unit of risk. Square Inc is currently generating about 0.26 per unit of volatility. If you would invest 6,856 in Square Inc on August 29, 2024 and sell it today you would earn a total of 1,662 from holding Square Inc or generate 24.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ASTRA INTERNATIONAL vs. Square Inc
Performance |
| Timeline |
| ASTRA INTERNATIONAL |
| Square Inc |
ASTRA INTERNATIONAL and Square Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ASTRA INTERNATIONAL and Square
The main advantage of trading using opposite ASTRA INTERNATIONAL and Square positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ASTRA INTERNATIONAL position performs unexpectedly, Square 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 Square will offset losses from the drop in Square's long position.| ASTRA INTERNATIONAL vs. PennyMac Mortgage Investment | ASTRA INTERNATIONAL vs. The City of | ASTRA INTERNATIONAL vs. JAPAN TOBACCO UNSPADR12 | ASTRA INTERNATIONAL vs. PennantPark Investment |
| Square vs. Shopify | Square vs. BYD Company Limited | Square vs. PayPal Holdings | Square vs. Palantir Technologies |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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