Correlation Between Astar and MG Credit
Can any of the company-specific risk be diversified away by investing in both Astar and MG Credit 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 MG Credit into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Astar and MG Credit Income, you can compare the effects of market volatilities on Astar and MG Credit 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 MG Credit. Check out your portfolio center. Please also check ongoing floating volatility patterns of Astar and MG Credit.
Diversification Opportunities for Astar and MG Credit
Good diversification
The 3 months correlation between Astar and MGCI is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Astar and MG Credit Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MG Credit Income 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 MG Credit. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MG Credit Income has no effect on the direction of Astar i.e., Astar and MG Credit go up and down completely randomly.
Pair Corralation between Astar and MG Credit
Assuming the 90 days trading horizon Astar is expected to under-perform the MG Credit. In addition to that, Astar is 4.88 times more volatile than MG Credit Income. It trades about -0.15 of its total potential returns per unit of risk. MG Credit Income is currently generating about 0.05 per unit of volatility. If you would invest 9,690 in MG Credit Income on October 27, 2024 and sell it today you would earn a total of 90.00 from holding MG Credit Income or generate 0.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Astar vs. MG Credit Income
Performance |
| Timeline |
| Astar |
| MG Credit Income |
Astar and MG Credit Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Astar and MG Credit
The main advantage of trading using opposite Astar and MG Credit positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Astar position performs unexpectedly, MG Credit 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 MG Credit will offset losses from the drop in MG Credit's long position.The idea behind Astar and MG Credit Income 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.| MG Credit vs. Martin Marietta Materials | MG Credit vs. Mobius Investment Trust | MG Credit vs. Herald Investment Trust | MG Credit vs. Seraphim Space Investment |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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