Correlation Between Astra Veda and Trust Stamp

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

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

Diversification Opportunities for Astra Veda and Trust Stamp

0.85

Correlation Coefficient

Astra Veda  Trust Stamp

Very poor diversification

The 3 months correlation between Astra and Trust is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Astra Veda and Trust Stamp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trust Stamp and Astra Veda 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 Veda are associated (or correlated) with Trust Stamp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trust Stamp has no effect on the direction of Astra Veda i.e., Astra Veda and Trust Stamp go up and down completely randomly.

Pair Corralation between Astra Veda and Trust Stamp

Given the investment horizon of 90 days Astra Veda is expected to generate 2.06 times more return on investment than Trust Stamp. However, Astra Veda is 2.06 times more volatile than Trust Stamp. It trades about 0.08 of its potential returns per unit of risk. Trust Stamp is currently generating about 0.02 per unit of risk. If you would invest  0.04  in Astra Veda on August 17, 2024 and sell it today you would earn a total of  0.00  from holding Astra Veda or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	95.65%
Values	Daily Returns

Astra Veda  vs.  Trust Stamp

Astra Veda

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Astra Veda has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Astra Veda is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Trust Stamp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Trust Stamp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in December 2024. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Astra Veda and Trust Stamp

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

The idea behind Astra Veda and Trust Stamp 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.