Correlation Between PennantPark Investment and Astral Foods
Can any of the company-specific risk be diversified away by investing in both PennantPark Investment 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 PennantPark Investment and Astral Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PennantPark Investment and Astral Foods Limited, you can compare the effects of market volatilities on PennantPark Investment 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 PennantPark Investment with a short position of Astral Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of PennantPark Investment and Astral Foods.
Diversification Opportunities for PennantPark Investment and Astral Foods
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between PennantPark and Astral is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding PennantPark Investment 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 PennantPark Investment 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 PennantPark Investment 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 PennantPark Investment i.e., PennantPark Investment and Astral Foods go up and down completely randomly.
Pair Corralation between PennantPark Investment and Astral Foods
Assuming the 90 days horizon PennantPark Investment is expected to generate 2.9 times less return on investment than Astral Foods. In addition to that, PennantPark Investment is 1.28 times more volatile than Astral Foods Limited. It trades about 0.06 of its total potential returns per unit of risk. Astral Foods Limited is currently generating about 0.24 per unit of volatility. If you would invest 860.00 in Astral Foods Limited on August 30, 2024 and sell it today you would earn a total of 90.00 from holding Astral Foods Limited or generate 10.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PennantPark Investment vs. Astral Foods Limited
Performance |
| Timeline |
| PennantPark Investment |
| Astral Foods Limited |
PennantPark Investment and Astral Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PennantPark Investment and Astral Foods
The main advantage of trading using opposite PennantPark Investment and Astral Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PennantPark Investment 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.| PennantPark Investment vs. THAI BEVERAGE | PennantPark Investment vs. LG Display Co | PennantPark Investment vs. USWE SPORTS AB | PennantPark Investment vs. NISSIN FOODS HLDGS |
| Astral Foods vs. Tyson Foods | Astral Foods vs. SalMar ASA | Astral Foods vs. Superior Plus Corp | Astral Foods vs. SIVERS SEMICONDUCTORS AB |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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