Correlation Between H FARM and Astral Foods
Can any of the company-specific risk be diversified away by investing in both H FARM 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 H FARM and Astral Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between H FARM SPA and Astral Foods Limited, you can compare the effects of market volatilities on H FARM 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 H FARM with a short position of Astral Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of H FARM and Astral Foods.
Diversification Opportunities for H FARM and Astral Foods
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between 5JQ and Astral is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding H FARM SPA 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 H FARM 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 H FARM SPA 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 H FARM i.e., H FARM and Astral Foods go up and down completely randomly.
Pair Corralation between H FARM and Astral Foods
Assuming the 90 days horizon H FARM is expected to generate 1.81 times less return on investment than Astral Foods. In addition to that, H FARM is 1.74 times more volatile than Astral Foods Limited. It trades about 0.02 of its total potential returns per unit of risk. Astral Foods Limited is currently generating about 0.06 per unit of volatility. If you would invest 725.00 in Astral Foods Limited on August 29, 2024 and sell it today you would earn a total of 225.00 from holding Astral Foods Limited or generate 31.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.53% |
| Values | Daily Returns |
H FARM SPA vs. Astral Foods Limited
Performance |
| Timeline |
| H FARM SPA |
| Astral Foods Limited |
H FARM and Astral Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with H FARM and Astral Foods
The main advantage of trading using opposite H FARM and Astral Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if H FARM 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.| H FARM vs. Rayonier Advanced Materials | H FARM vs. NEWELL RUBBERMAID | H FARM vs. BE Semiconductor Industries | H FARM vs. ON SEMICONDUCTOR |
| 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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