Correlation Between Astarta Holding and LSI Software
Can any of the company-specific risk be diversified away by investing in both Astarta Holding and LSI Software 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 Astarta Holding and LSI Software into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Astarta Holding NV and LSI Software SA, you can compare the effects of market volatilities on Astarta Holding and LSI Software 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 Astarta Holding with a short position of LSI Software. Check out your portfolio center. Please also check ongoing floating volatility patterns of Astarta Holding and LSI Software.
Diversification Opportunities for Astarta Holding and LSI Software
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Astarta and LSI is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Astarta Holding NV and LSI Software SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LSI Software SA and Astarta Holding 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 Astarta Holding NV are associated (or correlated) with LSI Software. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LSI Software SA has no effect on the direction of Astarta Holding i.e., Astarta Holding and LSI Software go up and down completely randomly.
Pair Corralation between Astarta Holding and LSI Software
Assuming the 90 days trading horizon Astarta Holding NV is expected to generate 1.38 times more return on investment than LSI Software. However, Astarta Holding is 1.38 times more volatile than LSI Software SA. It trades about 0.31 of its potential returns per unit of risk. LSI Software SA is currently generating about 0.23 per unit of risk. If you would invest 3,395 in Astarta Holding NV on September 13, 2024 and sell it today you would earn a total of 685.00 from holding Astarta Holding NV or generate 20.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Astarta Holding NV vs. LSI Software SA
Performance |
| Timeline |
| Astarta Holding NV |
| LSI Software SA |
Astarta Holding and LSI Software Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Astarta Holding and LSI Software
The main advantage of trading using opposite Astarta Holding and LSI Software positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Astarta Holding position performs unexpectedly, LSI Software 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 LSI Software will offset losses from the drop in LSI Software's long position.| Astarta Holding vs. LSI Software SA | Astarta Holding vs. Saule Technologies SA | Astarta Holding vs. Immobile | Astarta Holding vs. Enter Air SA |
| LSI Software vs. Asseco Poland SA | LSI Software vs. Asseco Business Solutions | LSI Software vs. Quantum Software SA |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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