Correlation Between Astralis and New Wave

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

By analyzing existing cross correlation between Astralis AS and New Wave Holdings, you can compare the effects of market volatilities on Astralis and New Wave 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 Astralis with a short position of New Wave. Check out your portfolio center. Please also check ongoing floating volatility patterns of Astralis and New Wave.

Diversification Opportunities for Astralis and New Wave

0.0

Correlation Coefficient

Astralis  New Wave

Pay attention - limited upside

The 3 months correlation between Astralis and New is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Astralis AS and New Wave Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Wave Holdings and Astralis 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 Astralis AS are associated (or correlated) with New Wave. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Wave Holdings has no effect on the direction of Astralis i.e., Astralis and New Wave go up and down completely randomly.

Pair Corralation between Astralis and New Wave

If you would invest  0.80  in New Wave Holdings on September 2, 2024 and sell it today you would earn a total of  0.41  from holding New Wave Holdings or generate 51.25% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.54%
Values	Daily Returns

Astralis AS  vs.  New Wave Holdings

Astralis AS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Astralis AS has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Astralis is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

New Wave Holdings

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in New Wave Holdings are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, New Wave reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Astralis and New Wave

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

The idea behind Astralis AS and New Wave Holdings 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.