Correlation Between Astar and SEPC
Can any of the company-specific risk be diversified away by investing in both Astar and SEPC 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 SEPC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Astar and SEPC Limited, you can compare the effects of market volatilities on Astar and SEPC 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 SEPC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Astar and SEPC.
Diversification Opportunities for Astar and SEPC
Significant diversification
The 3 months correlation between Astar and SEPC is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Astar and SEPC Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SEPC Limited 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 SEPC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SEPC Limited has no effect on the direction of Astar i.e., Astar and SEPC go up and down completely randomly.
Pair Corralation between Astar and SEPC
Assuming the 90 days trading horizon Astar is expected to generate 1.47 times more return on investment than SEPC. However, Astar is 1.47 times more volatile than SEPC Limited. It trades about -0.15 of its potential returns per unit of risk. SEPC Limited is currently generating about -0.27 per unit of risk. If you would invest 6.39 in Astar on October 25, 2024 and sell it today you would lose (1.05) from holding Astar or give up 16.43% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Astar vs. SEPC Limited
Performance |
| Timeline |
| Astar |
| SEPC Limited |
Astar and SEPC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Astar and SEPC
The main advantage of trading using opposite Astar and SEPC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Astar position performs unexpectedly, SEPC 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 SEPC will offset losses from the drop in SEPC's long position.The idea behind Astar and SEPC Limited 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.| SEPC vs. Kamat Hotels Limited | SEPC vs. Juniper Hotels | SEPC vs. JGCHEMICALS LIMITED | SEPC vs. Omkar Speciality Chemicals |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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