Correlation Between Astar and Hoist Finance
Can any of the company-specific risk be diversified away by investing in both Astar and Hoist Finance 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 Hoist Finance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Astar and Hoist Finance AB, you can compare the effects of market volatilities on Astar and Hoist Finance 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 Hoist Finance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Astar and Hoist Finance.
Diversification Opportunities for Astar and Hoist Finance
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Astar and Hoist is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Astar and Hoist Finance AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hoist Finance AB 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 Hoist Finance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hoist Finance AB has no effect on the direction of Astar i.e., Astar and Hoist Finance go up and down completely randomly.
Pair Corralation between Astar and Hoist Finance
Assuming the 90 days trading horizon Astar is expected to under-perform the Hoist Finance. In addition to that, Astar is 1.63 times more volatile than Hoist Finance AB. It trades about -0.19 of its total potential returns per unit of risk. Hoist Finance AB is currently generating about -0.02 per unit of volatility. If you would invest 790.00 in Hoist Finance AB on October 28, 2024 and sell it today you would lose (12.00) from holding Hoist Finance AB or give up 1.52% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Astar vs. Hoist Finance AB
Performance |
| Timeline |
| Astar |
| Hoist Finance AB |
Astar and Hoist Finance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Astar and Hoist Finance
The main advantage of trading using opposite Astar and Hoist Finance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Astar position performs unexpectedly, Hoist Finance 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 Hoist Finance will offset losses from the drop in Hoist Finance's long position.The idea behind Astar and Hoist Finance AB 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.| Hoist Finance vs. Austevoll Seafood ASA | Hoist Finance vs. Fast Retailing Co | Hoist Finance vs. United Natural Foods | Hoist Finance vs. Burlington Stores |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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