Correlation Between Astar and Sanichi Technology
Can any of the company-specific risk be diversified away by investing in both Astar and Sanichi Technology 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 Astar and Sanichi Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Astar and Sanichi Technology Bhd, you can compare the effects of market volatilities on Astar and Sanichi Technology 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 Astar with a short position of Sanichi Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Astar and Sanichi Technology.
Diversification Opportunities for Astar and Sanichi Technology
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Astar and Sanichi is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Astar and Sanichi Technology Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sanichi Technology Bhd and Astar 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 Astar are associated (or correlated) with Sanichi Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sanichi Technology Bhd has no effect on the direction of Astar i.e., Astar and Sanichi Technology go up and down completely randomly.
Pair Corralation between Astar and Sanichi Technology
Assuming the 90 days trading horizon Astar is expected to under-perform the Sanichi Technology. In addition to that, Astar is 1.21 times more volatile than Sanichi Technology Bhd. It trades about -0.14 of its total potential returns per unit of risk. Sanichi Technology Bhd is currently generating about -0.06 per unit of volatility. If you would invest 14.00 in Sanichi Technology Bhd on October 16, 2024 and sell it today you would lose (1.00) from holding Sanichi Technology Bhd or give up 7.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Astar vs. Sanichi Technology Bhd
Performance |
| Timeline |
| Astar |
| Sanichi Technology Bhd |
Astar and Sanichi Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Astar and Sanichi Technology
The main advantage of trading using opposite Astar and Sanichi Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Astar position performs unexpectedly, Sanichi Technology 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 Sanichi Technology will offset losses from the drop in Sanichi Technology's long position.The idea behind Astar and Sanichi Technology Bhd pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Sanichi Technology vs. Malayan Banking Bhd | Sanichi Technology vs. Binasat Communications Bhd | Sanichi Technology vs. Lotte Chemical Titan | Sanichi Technology vs. Hong Leong Bank |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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