Correlation Between WM Technology and Astor Star
Can any of the company-specific risk be diversified away by investing in both WM Technology and Astor Star 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 WM Technology and Astor Star into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WM Technology and Astor Star Fund, you can compare the effects of market volatilities on WM Technology and Astor Star 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 WM Technology with a short position of Astor Star. Check out your portfolio center. Please also check ongoing floating volatility patterns of WM Technology and Astor Star.
Diversification Opportunities for WM Technology and Astor Star
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between MAPS and Astor is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding WM Technology and Astor Star Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Astor Star Fund and WM Technology 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 WM Technology are associated (or correlated) with Astor Star. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Astor Star Fund has no effect on the direction of WM Technology i.e., WM Technology and Astor Star go up and down completely randomly.
Pair Corralation between WM Technology and Astor Star
Given the investment horizon of 90 days WM Technology is expected to generate 8.03 times more return on investment than Astor Star. However, WM Technology is 8.03 times more volatile than Astor Star Fund. It trades about 0.01 of its potential returns per unit of risk. Astor Star Fund is currently generating about -0.22 per unit of risk. If you would invest 109.00 in WM Technology on January 24, 2024 and sell it today you would lose (1.00) from holding WM Technology or give up 0.92% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
WM Technology vs. Astor Star Fund
Performance |
Timeline |
WM Technology |
Astor Star Fund |
WM Technology and Astor Star Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with WM Technology and Astor Star
The main advantage of trading using opposite WM Technology and Astor Star positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WM Technology position performs unexpectedly, Astor Star 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 Astor Star will offset losses from the drop in Astor Star's long position.WM Technology vs. C3 Ai Inc | WM Technology vs. Shopify | WM Technology vs. Snowflake | WM Technology vs. ServiceNow |
Astor Star vs. Astor Macro Alternative | Astor Star vs. Astor Longshort Fund | Astor Star vs. Astor Macro Alternative |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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