Correlation Between IoTeX Network and AST

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

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

Diversification Opportunities for IoTeX Network and AST

0.68

Correlation Coefficient

IoTeX Network  AST

Poor diversification

The 3 months correlation between IoTeX and AST is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding IoTeX Network and AST in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AST and IoTeX Network 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 IoTeX Network are associated (or correlated) with AST. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AST has no effect on the direction of IoTeX Network i.e., IoTeX Network and AST go up and down completely randomly.

Pair Corralation between IoTeX Network and AST

Assuming the 90 days trading horizon IoTeX Network is expected to generate 0.92 times more return on investment than AST. However, IoTeX Network is 1.09 times less risky than AST. It trades about 0.17 of its potential returns per unit of risk. AST is currently generating about 0.13 per unit of risk. If you would invest  3.45  in IoTeX Network on September 1, 2024 and sell it today you would earn a total of  2.08  from holding IoTeX Network or generate 60.29% return on investment over 90 days.

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

IoTeX Network  vs.  AST

IoTeX Network

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in IoTeX Network are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, IoTeX Network exhibited solid returns over the last few months and may actually be approaching a breakup point.

AST

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in AST are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, AST exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with IoTeX Network and AST

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

The idea behind IoTeX Network and AST 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.