Correlation Between Astera Labs, and Globalfoundries

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

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

Diversification Opportunities for Astera Labs, and Globalfoundries

0.8

Correlation Coefficient

Astera Labs,  Globalfoundries

Very poor diversification

The 3 months correlation between Astera and Globalfoundries is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Astera Labs, Common and Globalfoundries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Globalfoundries and Astera Labs, 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 Astera Labs, Common are associated (or correlated) with Globalfoundries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Globalfoundries has no effect on the direction of Astera Labs, i.e., Astera Labs, and Globalfoundries go up and down completely randomly.

Pair Corralation between Astera Labs, and Globalfoundries

Given the investment horizon of 90 days Astera Labs, Common is expected to generate 1.84 times more return on investment than Globalfoundries. However, Astera Labs, is 1.84 times more volatile than Globalfoundries. It trades about 0.31 of its potential returns per unit of risk. Globalfoundries is currently generating about 0.07 per unit of risk. If you would invest  4,386  in Astera Labs, Common on September 16, 2024 and sell it today you would earn a total of  8,828  from holding Astera Labs, Common or generate 201.28% return on investment over 90 days.

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

Astera Labs, Common  vs.  Globalfoundries

Astera Labs, Common

Risk-Adjusted Performance

24 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Astera Labs, Common are ranked lower than 24 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain basic indicators, Astera Labs, sustained solid returns over the last few months and may actually be approaching a breakup point.

Globalfoundries

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Globalfoundries are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak technical and fundamental indicators, Globalfoundries unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Astera Labs, and Globalfoundries

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

The idea behind Astera Labs, Common and Globalfoundries 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 Global Correlations module to find global opportunities by holding instruments from different markets.