Correlation Between Astral Foods and Prosus NV
Can any of the company-specific risk be diversified away by investing in both Astral Foods and Prosus NV 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 Astral Foods and Prosus NV into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Astral Foods Limited and Prosus NV, you can compare the effects of market volatilities on Astral Foods and Prosus NV 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 Astral Foods with a short position of Prosus NV. Check out your portfolio center. Please also check ongoing floating volatility patterns of Astral Foods and Prosus NV.
Diversification Opportunities for Astral Foods and Prosus NV
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Astral and Prosus is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Astral Foods Limited and Prosus NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prosus NV and Astral Foods 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 Astral Foods Limited are associated (or correlated) with Prosus NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prosus NV has no effect on the direction of Astral Foods i.e., Astral Foods and Prosus NV go up and down completely randomly.
Pair Corralation between Astral Foods and Prosus NV
Assuming the 90 days trading horizon Astral Foods Limited is expected to generate 1.93 times more return on investment than Prosus NV. However, Astral Foods is 1.93 times more volatile than Prosus NV. It trades about 0.24 of its potential returns per unit of risk. Prosus NV is currently generating about -0.08 per unit of risk. If you would invest 860.00 in Astral Foods Limited on September 2, 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 | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Astral Foods Limited vs. Prosus NV
Performance |
| Timeline |
| Astral Foods Limited |
| Prosus NV |
Astral Foods and Prosus NV Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Astral Foods and Prosus NV
The main advantage of trading using opposite Astral Foods and Prosus NV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Astral Foods position performs unexpectedly, Prosus NV 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 Prosus NV will offset losses from the drop in Prosus NV's long position.| Astral Foods vs. Vastned Retail NV | Astral Foods vs. TFS FINANCIAL | Astral Foods vs. Heartland Financial USA | Astral Foods vs. Mizuho Financial Group |
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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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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