Correlation Between Astral Foods and Chuangs China
Can any of the company-specific risk be diversified away by investing in both Astral Foods and Chuangs China 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 Chuangs China 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 Chuangs China Investments, you can compare the effects of market volatilities on Astral Foods and Chuangs China 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 Chuangs China. Check out your portfolio center. Please also check ongoing floating volatility patterns of Astral Foods and Chuangs China.
Diversification Opportunities for Astral Foods and Chuangs China
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Astral and Chuangs is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Astral Foods Limited and Chuangs China Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chuangs China Investments 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 Chuangs China. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chuangs China Investments has no effect on the direction of Astral Foods i.e., Astral Foods and Chuangs China go up and down completely randomly.
Pair Corralation between Astral Foods and Chuangs China
Assuming the 90 days trading horizon Astral Foods Limited is expected to generate 0.5 times more return on investment than Chuangs China. However, Astral Foods Limited is 2.01 times less risky than Chuangs China. It trades about 0.04 of its potential returns per unit of risk. Chuangs China Investments is currently generating about -0.01 per unit of risk. If you would invest 700.00 in Astral Foods Limited on August 31, 2024 and sell it today you would earn a total of 250.00 from holding Astral Foods Limited or generate 35.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.74% |
| Values | Daily Returns |
Astral Foods Limited vs. Chuangs China Investments
Performance |
| Timeline |
| Astral Foods Limited |
| Chuangs China Investments |
Astral Foods and Chuangs China Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Astral Foods and Chuangs China
The main advantage of trading using opposite Astral Foods and Chuangs China positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Astral Foods position performs unexpectedly, Chuangs China 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 Chuangs China will offset losses from the drop in Chuangs China's long position.| Astral Foods vs. SalMar ASA | Astral Foods vs. Superior Plus Corp | Astral Foods vs. NMI Holdings | Astral Foods vs. Origin Agritech |
| Chuangs China vs. Sun Hung Kai | Chuangs China vs. China Overseas Land | Chuangs China vs. CHINA VANKE TD | Chuangs China vs. Longfor Group Holdings |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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