Correlation Between Astral Foods and China Resources
Can any of the company-specific risk be diversified away by investing in both Astral Foods and China Resources 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 China Resources 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 China Resources Beer, you can compare the effects of market volatilities on Astral Foods and China Resources 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 China Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Astral Foods and China Resources.
Diversification Opportunities for Astral Foods and China Resources
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Astral and China is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Astral Foods Limited and China Resources Beer in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Resources Beer 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 China Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Resources Beer has no effect on the direction of Astral Foods i.e., Astral Foods and China Resources go up and down completely randomly.
Pair Corralation between Astral Foods and China Resources
Assuming the 90 days trading horizon Astral Foods Limited is expected to generate 0.51 times more return on investment than China Resources. However, Astral Foods Limited is 1.96 times less risky than China Resources. It trades about -0.26 of its potential returns per unit of risk. China Resources Beer is currently generating about -0.34 per unit of risk. If you would invest 960.00 in Astral Foods Limited on October 14, 2024 and sell it today you would lose (50.00) from holding Astral Foods Limited or give up 5.21% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Astral Foods Limited vs. China Resources Beer
Performance |
| Timeline |
| Astral Foods Limited |
| China Resources Beer |
Astral Foods and China Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Astral Foods and China Resources
The main advantage of trading using opposite Astral Foods and China Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Astral Foods position performs unexpectedly, China Resources 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 China Resources will offset losses from the drop in China Resources' long position.| Astral Foods vs. NIGHTINGALE HEALTH EO | Astral Foods vs. GRUPO CARSO A1 | Astral Foods vs. Planet Fitness | Astral Foods vs. Geely Automobile Holdings |
| China Resources vs. RETAIL FOOD GROUP | China Resources vs. Astral Foods Limited | China Resources vs. TRADEGATE | China Resources vs. EBRO FOODS |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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