Correlation Between CN MODERN and Astral Foods
Can any of the company-specific risk be diversified away by investing in both CN MODERN and Astral Foods 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 CN MODERN and Astral Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CN MODERN DAIRY and Astral Foods Limited, you can compare the effects of market volatilities on CN MODERN and Astral Foods 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 CN MODERN with a short position of Astral Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of CN MODERN and Astral Foods.
Diversification Opportunities for CN MODERN and Astral Foods
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between 07M and Astral is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding CN MODERN DAIRY and Astral Foods Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Astral Foods Limited and CN MODERN 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 CN MODERN DAIRY are associated (or correlated) with Astral Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Astral Foods Limited has no effect on the direction of CN MODERN i.e., CN MODERN and Astral Foods go up and down completely randomly.
Pair Corralation between CN MODERN and Astral Foods
Assuming the 90 days trading horizon CN MODERN is expected to generate 37.68 times less return on investment than Astral Foods. But when comparing it to its historical volatility, CN MODERN DAIRY is 1.16 times less risky than Astral Foods. It trades about 0.01 of its potential returns per unit of risk. Astral Foods Limited is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest 855.00 in Astral Foods Limited on September 1, 2024 and sell it today you would earn a total of 95.00 from holding Astral Foods Limited or generate 11.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CN MODERN DAIRY vs. Astral Foods Limited
Performance |
| Timeline |
| CN MODERN DAIRY |
| Astral Foods Limited |
CN MODERN and Astral Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CN MODERN and Astral Foods
The main advantage of trading using opposite CN MODERN and Astral Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CN MODERN position performs unexpectedly, Astral Foods 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 Astral Foods will offset losses from the drop in Astral Foods' long position.| CN MODERN vs. Fast Retailing Co | CN MODERN vs. National Retail Properties | CN MODERN vs. AAC TECHNOLOGHLDGADR | CN MODERN vs. GLG LIFE TECH |
| Astral Foods vs. EAT WELL INVESTMENT | Astral Foods vs. Apollo Investment Corp | Astral Foods vs. CHINA OIL AND | Astral Foods vs. New Residential 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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