Correlation Between Blue Label and Astoria Investments
Can any of the company-specific risk be diversified away by investing in both Blue Label and Astoria Investments 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 Blue Label and Astoria Investments into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Blue Label Telecoms and Astoria Investments, you can compare the effects of market volatilities on Blue Label and Astoria Investments 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 Blue Label with a short position of Astoria Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Blue Label and Astoria Investments.
Diversification Opportunities for Blue Label and Astoria Investments
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Blue and Astoria is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Blue Label Telecoms and Astoria Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Astoria Investments and Blue Label 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 Blue Label Telecoms are associated (or correlated) with Astoria Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Astoria Investments has no effect on the direction of Blue Label i.e., Blue Label and Astoria Investments go up and down completely randomly.
Pair Corralation between Blue Label and Astoria Investments
Assuming the 90 days trading horizon Blue Label Telecoms is expected to generate 1.19 times more return on investment than Astoria Investments. However, Blue Label is 1.19 times more volatile than Astoria Investments. It trades about 0.23 of its potential returns per unit of risk. Astoria Investments is currently generating about 0.02 per unit of risk. If you would invest 54,500 in Blue Label Telecoms on November 2, 2024 and sell it today you would earn a total of 10,000 from holding Blue Label Telecoms or generate 18.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Blue Label Telecoms vs. Astoria Investments
Performance |
| Timeline |
| Blue Label Telecoms |
| Astoria Investments |
Blue Label and Astoria Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Blue Label and Astoria Investments
The main advantage of trading using opposite Blue Label and Astoria Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Blue Label position performs unexpectedly, Astoria Investments 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 Astoria Investments will offset losses from the drop in Astoria Investments' long position.| Blue Label vs. MC Mining | Blue Label vs. Bytes Technology | Blue Label vs. Astral Foods | Blue Label vs. Mantengu Mining |
| Astoria Investments vs. Nedbank Group | Astoria Investments vs. Trematon Capital Investments | Astoria Investments vs. Astral Foods | Astoria Investments vs. Mantengu Mining |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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