Correlation Between Astral Foods and Dollar General
Can any of the company-specific risk be diversified away by investing in both Astral Foods and Dollar General 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 Dollar General 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 Dollar General, you can compare the effects of market volatilities on Astral Foods and Dollar General 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 Dollar General. Check out your portfolio center. Please also check ongoing floating volatility patterns of Astral Foods and Dollar General.
Diversification Opportunities for Astral Foods and Dollar General
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Astral and Dollar is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Astral Foods Limited and Dollar General in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dollar General 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 Dollar General. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dollar General has no effect on the direction of Astral Foods i.e., Astral Foods and Dollar General go up and down completely randomly.
Pair Corralation between Astral Foods and Dollar General
Assuming the 90 days trading horizon Astral Foods Limited is expected to generate 3.84 times more return on investment than Dollar General. However, Astral Foods is 3.84 times more volatile than Dollar General. It trades about 0.03 of its potential returns per unit of risk. Dollar General is currently generating about -0.07 per unit of risk. If you would invest 850.00 in Astral Foods Limited on September 14, 2024 and sell it today you would earn a total of 135.00 from holding Astral Foods Limited or generate 15.88% 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. Dollar General
Performance |
| Timeline |
| Astral Foods Limited |
| Dollar General |
Astral Foods and Dollar General Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Astral Foods and Dollar General
The main advantage of trading using opposite Astral Foods and Dollar General positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Astral Foods position performs unexpectedly, Dollar General 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 Dollar General will offset losses from the drop in Dollar General's long position.| Astral Foods vs. CN MODERN DAIRY | Astral Foods vs. Suntory Beverage Food | Astral Foods vs. Charoen Pokphand Foods | Astral Foods vs. BOSTON BEER A |
| Dollar General vs. Cogent Communications Holdings | Dollar General vs. Astral Foods Limited | Dollar General vs. Verizon Communications | Dollar General vs. THAI BEVERAGE |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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