Correlation Between Astra Energy and Spark Power
Can any of the company-specific risk be diversified away by investing in both Astra Energy and Spark Power 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 Energy and Spark Power into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Astra Energy and Spark Power Group, you can compare the effects of market volatilities on Astra Energy and Spark Power 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 Energy with a short position of Spark Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Astra Energy and Spark Power.
Diversification Opportunities for Astra Energy and Spark Power
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Astra and Spark is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Astra Energy and Spark Power Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spark Power Group and Astra Energy 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 Energy are associated (or correlated) with Spark Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Spark Power Group has no effect on the direction of Astra Energy i.e., Astra Energy and Spark Power go up and down completely randomly.
Pair Corralation between Astra Energy and Spark Power
Given the investment horizon of 90 days Astra Energy is expected to generate 30.97 times less return on investment than Spark Power. But when comparing it to its historical volatility, Astra Energy is 10.04 times less risky than Spark Power. It trades about 0.04 of its potential returns per unit of risk. Spark Power Group is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 2.00 in Spark Power Group on August 28, 2024 and sell it today you would earn a total of 25.00 from holding Spark Power Group or generate 1250.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 31.52% |
| Values | Daily Returns |
Astra Energy vs. Spark Power Group
Performance |
| Timeline |
| Astra Energy |
| Spark Power Group |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Astra Energy and Spark Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Astra Energy and Spark Power
The main advantage of trading using opposite Astra Energy and Spark Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Astra Energy position performs unexpectedly, Spark Power 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 Spark Power will offset losses from the drop in Spark Power's long position.| Astra Energy vs. Alternus Energy Group | Astra Energy vs. American Security Resources | Astra Energy vs. Carnegie Clean Energy | Astra Energy vs. Altius Renewable Royalties |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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