Correlation Between ASTRA INTERNATIONAL and RYOHIN UNSPADR/1

Can any of the company-specific risk be diversified away by investing in both ASTRA INTERNATIONAL and RYOHIN UNSPADR/1 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 ASTRA INTERNATIONAL and RYOHIN UNSPADR/1 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between ASTRA INTERNATIONAL and RYOHIN UNSPADR1, you can compare the effects of market volatilities on ASTRA INTERNATIONAL and RYOHIN UNSPADR/1 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 ASTRA INTERNATIONAL with a short position of RYOHIN UNSPADR/1. Check out your portfolio center. Please also check ongoing floating volatility patterns of ASTRA INTERNATIONAL and RYOHIN UNSPADR/1.

Diversification Opportunities for ASTRA INTERNATIONAL and RYOHIN UNSPADR/1

-0.35

Correlation Coefficient

ASTRA INTERNATIONAL  RYOHIN UNSPADR/1

Very good diversification

The 3 months correlation between ASTRA and RYOHIN is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding ASTRA INTERNATIONAL and RYOHIN UNSPADR1 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RYOHIN UNSPADR/1 and ASTRA INTERNATIONAL 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 ASTRA INTERNATIONAL are associated (or correlated) with RYOHIN UNSPADR/1. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RYOHIN UNSPADR/1 has no effect on the direction of ASTRA INTERNATIONAL i.e., ASTRA INTERNATIONAL and RYOHIN UNSPADR/1 go up and down completely randomly.

Pair Corralation between ASTRA INTERNATIONAL and RYOHIN UNSPADR/1

Assuming the 90 days trading horizon ASTRA INTERNATIONAL is expected to under-perform the RYOHIN UNSPADR/1. But the stock apears to be less risky and, when comparing its historical volatility, ASTRA INTERNATIONAL is 1.03 times less risky than RYOHIN UNSPADR/1. The stock trades about -0.02 of its potential returns per unit of risk. The RYOHIN UNSPADR1 is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  1,630  in RYOHIN UNSPADR1 on September 2, 2024 and sell it today you would earn a total of  270.00  from holding RYOHIN UNSPADR1 or generate 16.56% return on investment over 90 days.

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

ASTRA INTERNATIONAL  vs.  RYOHIN UNSPADR1

ASTRA INTERNATIONAL

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ASTRA INTERNATIONAL has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, ASTRA INTERNATIONAL is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

RYOHIN UNSPADR/1

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in RYOHIN UNSPADR1 are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain forward-looking signals, RYOHIN UNSPADR/1 reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ASTRA INTERNATIONAL and RYOHIN UNSPADR/1

The main advantage of trading using opposite ASTRA INTERNATIONAL and RYOHIN UNSPADR/1 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ASTRA INTERNATIONAL position performs unexpectedly, RYOHIN UNSPADR/1 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 RYOHIN UNSPADR/1 will offset losses from the drop in RYOHIN UNSPADR/1's long position.

The idea behind ASTRA INTERNATIONAL and RYOHIN UNSPADR1 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.