Correlation Between ISE Chemicals and Astro Communications

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

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

Diversification Opportunities for ISE Chemicals and Astro Communications

1.0

Correlation Coefficient

ISE Chemicals  Astro Communications

No risk reduction

The 3 months correlation between ISE and Astro is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding ISE Chemicals and Astro Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Astro Communications and ISE Chemicals 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 ISE Chemicals are associated (or correlated) with Astro Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Astro Communications has no effect on the direction of ISE Chemicals i.e., ISE Chemicals and Astro Communications go up and down completely randomly.

Pair Corralation between ISE Chemicals and Astro Communications

If you would invest  169.00  in Astro Communications on September 7, 2025 and sell it today you would earn a total of  0.00  from holding Astro Communications or generate 0.0% return on investment over 90 days.

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

ISE Chemicals  vs.  Astro Communications

ISE Chemicals

Risk-Adjusted Performance

Weakest

Over the last 90 days ISE Chemicals has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable primary indicators, ISE Chemicals is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Astro Communications

Risk-Adjusted Performance

Weakest

Over the last 90 days Astro Communications has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Astro Communications is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with ISE Chemicals and Astro Communications

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

The idea behind ISE Chemicals and Astro Communications 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.