Correlation Between Astar and Plant Advanced
Can any of the company-specific risk be diversified away by investing in both Astar and Plant Advanced 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 Plant Advanced into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Astar and Plant Advanced Technologies, you can compare the effects of market volatilities on Astar and Plant Advanced 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 Plant Advanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Astar and Plant Advanced.
Diversification Opportunities for Astar and Plant Advanced
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Astar and Plant is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Astar and Plant Advanced Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Plant Advanced Techn 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 Plant Advanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Plant Advanced Techn has no effect on the direction of Astar i.e., Astar and Plant Advanced go up and down completely randomly.
Pair Corralation between Astar and Plant Advanced
Assuming the 90 days trading horizon Astar is expected to under-perform the Plant Advanced. In addition to that, Astar is 2.88 times more volatile than Plant Advanced Technologies. It trades about -0.18 of its total potential returns per unit of risk. Plant Advanced Technologies is currently generating about 0.01 per unit of volatility. If you would invest 1,190 in Plant Advanced Technologies on October 12, 2024 and sell it today you would earn a total of 0.00 from holding Plant Advanced Technologies or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 90.48% |
| Values | Daily Returns |
Astar vs. Plant Advanced Technologies
Performance |
| Timeline |
| Astar |
| Plant Advanced Techn |
Astar and Plant Advanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Astar and Plant Advanced
The main advantage of trading using opposite Astar and Plant Advanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Astar position performs unexpectedly, Plant Advanced 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 Plant Advanced will offset losses from the drop in Plant Advanced's long position.The idea behind Astar and Plant Advanced Technologies 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.| Plant Advanced vs. Sensorion SA | Plant Advanced vs. Quantum Genomics SA | Plant Advanced vs. Valbiotis SAS | Plant Advanced vs. OSE Pharma 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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