Correlation Between IGEN Networks and Astra Veda
Can any of the company-specific risk be diversified away by investing in both IGEN Networks and Astra Veda 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 IGEN Networks and Astra Veda into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between IGEN Networks Corp and Astra Veda, you can compare the effects of market volatilities on IGEN Networks and Astra Veda 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 IGEN Networks with a short position of Astra Veda. Check out your portfolio center. Please also check ongoing floating volatility patterns of IGEN Networks and Astra Veda.
Diversification Opportunities for IGEN Networks and Astra Veda
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between IGEN and Astra is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding IGEN Networks Corp and Astra Veda in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Astra Veda and IGEN Networks 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 IGEN Networks Corp are associated (or correlated) with Astra Veda. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Astra Veda has no effect on the direction of IGEN Networks i.e., IGEN Networks and Astra Veda go up and down completely randomly.
Pair Corralation between IGEN Networks and Astra Veda
Given the investment horizon of 90 days IGEN Networks Corp is expected to generate 4.0 times more return on investment than Astra Veda. However, IGEN Networks is 4.0 times more volatile than Astra Veda. It trades about 0.07 of its potential returns per unit of risk. Astra Veda is currently generating about 0.01 per unit of risk. If you would invest 0.15 in IGEN Networks Corp on August 27, 2024 and sell it today you would lose (0.14) from holding IGEN Networks Corp or give up 93.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
IGEN Networks Corp vs. Astra Veda
Performance |
| Timeline |
| IGEN Networks Corp |
| Astra Veda |
IGEN Networks and Astra Veda Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IGEN Networks and Astra Veda
The main advantage of trading using opposite IGEN Networks and Astra Veda positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IGEN Networks position performs unexpectedly, Astra Veda 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 Astra Veda will offset losses from the drop in Astra Veda's long position.| IGEN Networks vs. Salesforce | IGEN Networks vs. SAP SE ADR | IGEN Networks vs. ServiceNow | IGEN Networks vs. Intuit Inc |
| Astra Veda vs. Salesforce | Astra Veda vs. SAP SE ADR | Astra Veda vs. ServiceNow | Astra Veda vs. Intuit Inc |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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