Correlation Between Astar and Veltex
Can any of the company-specific risk be diversified away by investing in both Astar and Veltex 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 Veltex into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Astar and Veltex, you can compare the effects of market volatilities on Astar and Veltex 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 Veltex. Check out your portfolio center. Please also check ongoing floating volatility patterns of Astar and Veltex.
Diversification Opportunities for Astar and Veltex
Very good diversification
The 3 months correlation between Astar and Veltex is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Astar and Veltex in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Veltex 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 Veltex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Veltex has no effect on the direction of Astar i.e., Astar and Veltex go up and down completely randomly.
Pair Corralation between Astar and Veltex
Assuming the 90 days trading horizon Astar is expected to under-perform the Veltex. But the crypto coin apears to be less risky and, when comparing its historical volatility, Astar is 1.84 times less risky than Veltex. The crypto coin trades about -0.18 of its potential returns per unit of risk. The Veltex is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 7.38 in Veltex on October 29, 2024 and sell it today you would earn a total of 0.10 from holding Veltex or generate 1.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 85.71% |
| Values | Daily Returns |
Astar vs. Veltex
Performance |
| Timeline |
| Astar |
| Veltex |
Astar and Veltex Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Astar and Veltex
The main advantage of trading using opposite Astar and Veltex positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Astar position performs unexpectedly, Veltex 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 Veltex will offset losses from the drop in Veltex's long position.The idea behind Astar and Veltex 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.| Veltex vs. JD Health International | Veltex vs. JD Health International | Veltex vs. Fresenius SE Co | Veltex vs. Fresenius SE Co |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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