Correlation Between Astar and Shionogi
Can any of the company-specific risk be diversified away by investing in both Astar and Shionogi 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 Shionogi into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Astar and Shionogi Co, you can compare the effects of market volatilities on Astar and Shionogi 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 Shionogi. Check out your portfolio center. Please also check ongoing floating volatility patterns of Astar and Shionogi.
Diversification Opportunities for Astar and Shionogi
Good diversification
The 3 months correlation between Astar and Shionogi is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Astar and Shionogi Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shionogi 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 Shionogi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shionogi has no effect on the direction of Astar i.e., Astar and Shionogi go up and down completely randomly.
Pair Corralation between Astar and Shionogi
Assuming the 90 days trading horizon Astar is expected to generate 1.64 times more return on investment than Shionogi. However, Astar is 1.64 times more volatile than Shionogi Co. It trades about 0.09 of its potential returns per unit of risk. Shionogi Co is currently generating about -0.22 per unit of risk. If you would invest 5.92 in Astar on October 21, 2024 and sell it today you would earn a total of 0.44 from holding Astar or generate 7.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 90.48% |
| Values | Daily Returns |
Astar vs. Shionogi Co
Performance |
| Timeline |
| Astar |
| Shionogi |
Astar and Shionogi Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Astar and Shionogi
The main advantage of trading using opposite Astar and Shionogi positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Astar position performs unexpectedly, Shionogi 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 Shionogi will offset losses from the drop in Shionogi's long position.The idea behind Astar and Shionogi Co 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.| Shionogi vs. Pacira BioSciences, | Shionogi vs. Shionogi Co Ltd | Shionogi vs. Sunshine Biopharma | Shionogi vs. China SXT Pharmaceuticals |
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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