Correlation Between Astral Foods and EMERSON ELECTRIC
Can any of the company-specific risk be diversified away by investing in both Astral Foods and EMERSON ELECTRIC 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 EMERSON ELECTRIC 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 EMERSON ELECTRIC, you can compare the effects of market volatilities on Astral Foods and EMERSON ELECTRIC 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 EMERSON ELECTRIC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Astral Foods and EMERSON ELECTRIC.
Diversification Opportunities for Astral Foods and EMERSON ELECTRIC
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Astral and EMERSON is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Astral Foods Limited and EMERSON ELECTRIC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EMERSON ELECTRIC 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 EMERSON ELECTRIC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EMERSON ELECTRIC has no effect on the direction of Astral Foods i.e., Astral Foods and EMERSON ELECTRIC go up and down completely randomly.
Pair Corralation between Astral Foods and EMERSON ELECTRIC
Assuming the 90 days trading horizon Astral Foods Limited is expected to generate 6.09 times more return on investment than EMERSON ELECTRIC. However, Astral Foods is 6.09 times more volatile than EMERSON ELECTRIC. It trades about 0.03 of its potential returns per unit of risk. EMERSON ELECTRIC is currently generating about 0.05 per unit of risk. If you would invest 870.00 in Astral Foods Limited on September 24, 2024 and sell it today you would earn a total of 85.00 from holding Astral Foods Limited or generate 9.77% 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. EMERSON ELECTRIC
Performance |
| Timeline |
| Astral Foods Limited |
| EMERSON ELECTRIC |
Astral Foods and EMERSON ELECTRIC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Astral Foods and EMERSON ELECTRIC
The main advantage of trading using opposite Astral Foods and EMERSON ELECTRIC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Astral Foods position performs unexpectedly, EMERSON ELECTRIC 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 EMERSON ELECTRIC will offset losses from the drop in EMERSON ELECTRIC's long position.| Astral Foods vs. Motorcar Parts of | Astral Foods vs. NISSAN CHEMICAL IND | Astral Foods vs. Quaker Chemical | Astral Foods vs. CHEMICAL INDUSTRIES |
| EMERSON ELECTRIC vs. PLANT VEDA FOODS | EMERSON ELECTRIC vs. THAI BEVERAGE | EMERSON ELECTRIC vs. COFCO Joycome Foods | EMERSON ELECTRIC vs. Astral Foods Limited |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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