Correlation Between Universal Partners and Astoria Investments
Can any of the company-specific risk be diversified away by investing in both Universal Partners 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 Universal Partners and Astoria Investments into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Universal Partners and Astoria Investments, you can compare the effects of market volatilities on Universal Partners 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 Universal Partners with a short position of Astoria Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Universal Partners and Astoria Investments.
Diversification Opportunities for Universal Partners and Astoria Investments
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Universal and Astoria is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Universal Partners and Astoria Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Astoria Investments and Universal Partners 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 Universal Partners 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 Universal Partners i.e., Universal Partners and Astoria Investments go up and down completely randomly.
Pair Corralation between Universal Partners and Astoria Investments
Assuming the 90 days trading horizon Universal Partners is expected to under-perform the Astoria Investments. But the stock apears to be less risky and, when comparing its historical volatility, Universal Partners is 1.79 times less risky than Astoria Investments. The stock trades about -0.04 of its potential returns per unit of risk. The Astoria Investments is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 81,500 in Astoria Investments on September 2, 2024 and sell it today you would earn a total of 1,000.00 from holding Astoria Investments or generate 1.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Universal Partners vs. Astoria Investments
Performance |
| Timeline |
| Universal Partners |
| Astoria Investments |
Universal Partners and Astoria Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Universal Partners and Astoria Investments
The main advantage of trading using opposite Universal Partners and Astoria Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Universal Partners 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.The idea behind Universal Partners and Astoria Investments 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.| Astoria Investments vs. Zeder Investments | Astoria Investments vs. Sabvest Capital | Astoria Investments vs. Universal Partners |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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