Correlation Between Astra Veda and NuGene International

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

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

Diversification Opportunities for Astra Veda and NuGene International

0.39

Correlation Coefficient

Astra Veda  NuGene International

Weak diversification

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

Pair Corralation between Astra Veda and NuGene International

Given the investment horizon of 90 days Astra Veda is expected to under-perform the NuGene International. But the pink sheet apears to be less risky and, when comparing its historical volatility, Astra Veda is 1.09 times less risky than NuGene International. The pink sheet trades about 0.0 of its potential returns per unit of risk. The NuGene International is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  1.00  in NuGene International on August 17, 2024 and sell it today you would lose (0.25) from holding NuGene International or give up 25.0% of portfolio value over 90 days.

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

Astra Veda  vs.  NuGene International

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.

NuGene International

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in NuGene International are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very fragile technical and fundamental indicators, NuGene International displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Astra Veda and NuGene International

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

The idea behind Astra Veda and NuGene International 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.