Correlation Between Thungela Resources and Astoria Investments
Can any of the company-specific risk be diversified away by investing in both Thungela Resources 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 Thungela Resources and Astoria Investments into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Thungela Resources Limited and Astoria Investments, you can compare the effects of market volatilities on Thungela Resources 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 Thungela Resources with a short position of Astoria Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thungela Resources and Astoria Investments.
Diversification Opportunities for Thungela Resources and Astoria Investments
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Thungela and Astoria is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Thungela Resources Limited and Astoria Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Astoria Investments and Thungela Resources 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 Thungela Resources Limited 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 Thungela Resources i.e., Thungela Resources and Astoria Investments go up and down completely randomly.
Pair Corralation between Thungela Resources and Astoria Investments
Assuming the 90 days trading horizon Thungela Resources Limited is expected to under-perform the Astoria Investments. In addition to that, Thungela Resources is 1.29 times more volatile than Astoria Investments. It trades about -0.02 of its total potential returns per unit of risk. Astoria Investments is currently generating about 0.05 per unit of volatility. If you would invest 81,000 in Astoria Investments on August 30, 2024 and sell it today you would earn a total of 1,500 from holding Astoria Investments or generate 1.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Thungela Resources Limited vs. Astoria Investments
Performance |
| Timeline |
| Thungela Resources |
| Astoria Investments |
Thungela Resources and Astoria Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thungela Resources and Astoria Investments
The main advantage of trading using opposite Thungela Resources and Astoria Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thungela Resources 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.| Thungela Resources vs. City Lodge Hotels | Thungela Resources vs. We Buy Cars | Thungela Resources vs. Lesaka Technologies | Thungela Resources vs. Astral Foods |
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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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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