Correlation Between Astrotech Corp and Societe

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

By analyzing existing cross correlation between Astrotech Corp and Societe Generale 7875, you can compare the effects of market volatilities on Astrotech Corp and Societe 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 Astrotech Corp with a short position of Societe. Check out your portfolio center. Please also check ongoing floating volatility patterns of Astrotech Corp and Societe.

Diversification Opportunities for Astrotech Corp and Societe

0.28

Correlation Coefficient

Astrotech Corp Societe

Modest diversification

The 3 months correlation between Astrotech and Societe is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Astrotech Corp and Societe Generale 7.875% perp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Societe Generale 7875 and Astrotech Corp 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 Astrotech Corp are associated (or correlated) with Societe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Societe Generale 7875 has no effect on the direction of Astrotech Corp i.e., Astrotech Corp and Societe go up and down completely randomly.

Pair Corralation between Astrotech Corp and Societe

Given the investment horizon of 90 days Astrotech Corp is expected to generate 1.56 times more return on investment than Societe. However, Astrotech Corp is 1.56 times more volatile than Societe Generale 7875. It trades about 0.04 of its potential returns per unit of risk. Societe Generale 7875 is currently generating about 0.0 per unit of risk. If you would invest  1,036  in Astrotech Corp on March 6, 2023 and sell it today you would earn a total of  113.00  from holding Astrotech Corp or generate 10.91% return on investment over 90 days.

Astrotech Corp  vs.  Societe Generale 7.875% perp.

Astrotech Corp

Astrotech Performance

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Over the last 90 days Astrotech Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Societe Generale 7875

Societe Performance

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Over the last 90 days Societe Generale 7875 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Societe is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Astrotech Corp and Societe

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

The idea behind Astrotech Corp and Societe Generale 7875 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.