Correlation Between Astoria Investments and Arrowhead Properties

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

By analyzing existing cross correlation between Astoria Investments and Arrowhead Properties Ltd, you can compare the effects of market volatilities on Astoria Investments and Arrowhead Properties 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 Astoria Investments with a short position of Arrowhead Properties. Check out your portfolio center. Please also check ongoing floating volatility patterns of Astoria Investments and Arrowhead Properties.

Diversification Opportunities for Astoria Investments and Arrowhead Properties

-0.48

Correlation Coefficient

Astoria Investments  Arrowhead Properties

Very good diversification

The 3 months correlation between Astoria and Arrowhead is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Astoria Investments and Arrowhead Properties Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arrowhead Properties and Astoria Investments 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 Astoria Investments are associated (or correlated) with Arrowhead Properties. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arrowhead Properties has no effect on the direction of Astoria Investments i.e., Astoria Investments and Arrowhead Properties go up and down completely randomly.

Pair Corralation between Astoria Investments and Arrowhead Properties

Assuming the 90 days trading horizon Astoria Investments is expected to under-perform the Arrowhead Properties. In addition to that, Astoria Investments is 1.87 times more volatile than Arrowhead Properties Ltd. It trades about -0.02 of its total potential returns per unit of risk. Arrowhead Properties Ltd is currently generating about 0.15 per unit of volatility. If you would invest  44,200  in Arrowhead Properties Ltd on September 5, 2024 and sell it today you would earn a total of  6,200  from holding Arrowhead Properties Ltd or generate 14.03% return on investment over 90 days.

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

Astoria Investments  vs.  Arrowhead Properties Ltd

Astoria Investments

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Astoria Investments has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Astoria Investments is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Arrowhead Properties

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Arrowhead Properties Ltd are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Arrowhead Properties exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Astoria Investments and Arrowhead Properties

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

The idea behind Astoria Investments and Arrowhead Properties Ltd 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.

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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.