Correlation Between TSR and AstroNova

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

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

Diversification Opportunities for TSR and AstroNova

0.3

Correlation Coefficient

TSR  AstroNova

Weak diversification

The 3 months correlation between TSR and AstroNova is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding TSR Inc and AstroNova in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AstroNova and TSR 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 TSR Inc are associated (or correlated) with AstroNova. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AstroNova has no effect on the direction of TSR i.e., TSR and AstroNova go up and down completely randomly.

Pair Corralation between TSR and AstroNova

If you would invest  1,408  in AstroNova on September 14, 2024 and sell it today you would earn a total of  167.00  from holding AstroNova or generate 11.86% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	1.59%
Values	Daily Returns

TSR Inc  vs.  AstroNova

TSR Inc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days TSR Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, TSR is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

AstroNova

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in AstroNova are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, AstroNova unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with TSR and AstroNova

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

The idea behind TSR Inc and AstroNova 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.