Correlation Between Alpha Astika and Flour Mills

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

By analyzing existing cross correlation between Alpha Astika Akinita and Flour Mills Kepenos, you can compare the effects of market volatilities on Alpha Astika and Flour Mills 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 Alpha Astika with a short position of Flour Mills. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alpha Astika and Flour Mills.

Diversification Opportunities for Alpha Astika and Flour Mills

-0.39

Correlation Coefficient

Alpha Astika  Flour Mills

Very good diversification

The 3 months correlation between Alpha and Flour is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Alpha Astika Akinita and Flour Mills Kepenos in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Flour Mills Kepenos and Alpha Astika 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 Alpha Astika Akinita are associated (or correlated) with Flour Mills. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Flour Mills Kepenos has no effect on the direction of Alpha Astika i.e., Alpha Astika and Flour Mills go up and down completely randomly.

Pair Corralation between Alpha Astika and Flour Mills

Assuming the 90 days trading horizon Alpha Astika is expected to generate 30.87 times less return on investment than Flour Mills. But when comparing it to its historical volatility, Alpha Astika Akinita is 2.88 times less risky than Flour Mills. It trades about 0.01 of its potential returns per unit of risk. Flour Mills Kepenos is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  160.00  in Flour Mills Kepenos on September 12, 2024 and sell it today you would earn a total of  62.00  from holding Flour Mills Kepenos or generate 38.75% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Alpha Astika Akinita  vs.  Flour Mills Kepenos

Alpha Astika Akinita

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Alpha Astika Akinita are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Alpha Astika is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Flour Mills Kepenos

Risk-Adjusted Performance

11 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Flour Mills Kepenos are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain basic indicators, Flour Mills sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Alpha Astika and Flour Mills

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

The idea behind Alpha Astika Akinita and Flour Mills Kepenos 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.