Correlation Between Dug Technology and Astral Resources

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Can any of the company-specific risk be diversified away by investing in both Dug Technology and Astral 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 Dug Technology and Astral Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dug Technology and Astral Resources NL, you can compare the effects of market volatilities on Dug Technology and Astral 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 Dug Technology with a short position of Astral Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dug Technology and Astral Resources.

Diversification Opportunities for Dug Technology and Astral Resources

-0.05
  Correlation Coefficient

Good diversification

The 3 months correlation between Dug and Astral is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Dug Technology and Astral Resources NL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Astral Resources and Dug Technology 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 Dug Technology are associated (or correlated) with Astral Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Astral Resources has no effect on the direction of Dug Technology i.e., Dug Technology and Astral Resources go up and down completely randomly.

Pair Corralation between Dug Technology and Astral Resources

Assuming the 90 days trading horizon Dug Technology is expected to under-perform the Astral Resources. But the stock apears to be less risky and, when comparing its historical volatility, Dug Technology is 1.32 times less risky than Astral Resources. The stock trades about -0.16 of its potential returns per unit of risk. The Astral Resources NL is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  11.00  in Astral Resources NL on October 24, 2024 and sell it today you would earn a total of  3.00  from holding Astral Resources NL or generate 27.27% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Dug Technology  vs.  Astral Resources NL

 Performance 
       Timeline  
Dug Technology 

Risk-Adjusted Performance

0 of 100

 
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Strong
Very Weak
Over the last 90 days Dug Technology has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's technical and fundamental indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.
Astral Resources 

Risk-Adjusted Performance

1 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Astral Resources NL are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Astral Resources may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Dug Technology and Astral Resources Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Dug Technology and Astral Resources

The main advantage of trading using opposite Dug Technology and Astral Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dug Technology position performs unexpectedly, Astral 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 Astral Resources will offset losses from the drop in Astral Resources' long position.
The idea behind Dug Technology and Astral Resources NL 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.
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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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