Correlation Between Astar and Rochester Resources
Can any of the company-specific risk be diversified away by investing in both Astar and Rochester Resources 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 Rochester Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Astar and Rochester Resources, you can compare the effects of market volatilities on Astar and Rochester Resources 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 Rochester Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Astar and Rochester Resources.
Diversification Opportunities for Astar and Rochester Resources
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Astar and Rochester is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Astar and Rochester Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rochester Resources 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 Rochester Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rochester Resources has no effect on the direction of Astar i.e., Astar and Rochester Resources go up and down completely randomly.
Pair Corralation between Astar and Rochester Resources
Assuming the 90 days trading horizon Astar is expected to under-perform the Rochester Resources. But the crypto coin apears to be less risky and, when comparing its historical volatility, Astar is 3.17 times less risky than Rochester Resources. The crypto coin trades about 0.0 of its potential returns per unit of risk. The Rochester Resources is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 2.00 in Rochester Resources on November 2, 2024 and sell it today you would earn a total of 2.00 from holding Rochester Resources or generate 100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.13% |
| Values | Daily Returns |
Astar vs. Rochester Resources
Performance |
| Timeline |
| Astar |
| Rochester Resources |
Astar and Rochester Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Astar and Rochester Resources
The main advantage of trading using opposite Astar and Rochester Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Astar position performs unexpectedly, Rochester Resources 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 Rochester Resources will offset losses from the drop in Rochester Resources' long position.The idea behind Astar and Rochester Resources 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.| Rochester Resources vs. Mako Mining Corp | Rochester Resources vs. Titanium Transportation Group | Rochester Resources vs. Maple Leaf Foods | Rochester Resources vs. Pace Metals |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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