Correlation Between ASTORY CoLtd and TES Co

Can any of the company-specific risk be diversified away by investing in both ASTORY CoLtd and TES Co 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 ASTORY CoLtd and TES Co into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between ASTORY CoLtd and TES Co, you can compare the effects of market volatilities on ASTORY CoLtd and TES Co 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 ASTORY CoLtd with a short position of TES Co. Check out your portfolio center. Please also check ongoing floating volatility patterns of ASTORY CoLtd and TES Co.

Diversification Opportunities for ASTORY CoLtd and TES Co

-0.33

Correlation Coefficient

ASTORY CoLtd  TES Co

Very good diversification

The 3 months correlation between ASTORY and TES is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding ASTORY CoLtd and TES Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TES Co and ASTORY CoLtd 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 ASTORY CoLtd are associated (or correlated) with TES Co. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TES Co has no effect on the direction of ASTORY CoLtd i.e., ASTORY CoLtd and TES Co go up and down completely randomly.

Pair Corralation between ASTORY CoLtd and TES Co

Assuming the 90 days trading horizon ASTORY CoLtd is expected to generate 1.21 times more return on investment than TES Co. However, ASTORY CoLtd is 1.21 times more volatile than TES Co. It trades about 0.04 of its potential returns per unit of risk. TES Co is currently generating about -0.03 per unit of risk. If you would invest  740,000  in ASTORY CoLtd on September 29, 2024 and sell it today you would earn a total of  42,000  from holding ASTORY CoLtd or generate 5.68% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

ASTORY CoLtd  vs.  TES Co

ASTORY CoLtd

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in ASTORY CoLtd are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, ASTORY CoLtd may actually be approaching a critical reversion point that can send shares even higher in January 2025.

TES Co

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days TES Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, TES Co is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with ASTORY CoLtd and TES Co

The main advantage of trading using opposite ASTORY CoLtd and TES Co positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ASTORY CoLtd position performs unexpectedly, TES Co 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 TES Co will offset losses from the drop in TES Co's long position.

The idea behind ASTORY CoLtd and TES Co 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.