Correlation Between Astral Foods and ELECTRONIC ARTS
Can any of the company-specific risk be diversified away by investing in both Astral Foods and ELECTRONIC ARTS 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 ELECTRONIC ARTS 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 ELECTRONIC ARTS, you can compare the effects of market volatilities on Astral Foods and ELECTRONIC ARTS 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 ELECTRONIC ARTS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Astral Foods and ELECTRONIC ARTS.
Diversification Opportunities for Astral Foods and ELECTRONIC ARTS
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Astral and ELECTRONIC is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Astral Foods Limited and ELECTRONIC ARTS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ELECTRONIC ARTS 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 ELECTRONIC ARTS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ELECTRONIC ARTS has no effect on the direction of Astral Foods i.e., Astral Foods and ELECTRONIC ARTS go up and down completely randomly.
Pair Corralation between Astral Foods and ELECTRONIC ARTS
Assuming the 90 days trading horizon Astral Foods Limited is expected to generate 1.04 times more return on investment than ELECTRONIC ARTS. However, Astral Foods is 1.04 times more volatile than ELECTRONIC ARTS. It trades about -0.03 of its potential returns per unit of risk. ELECTRONIC ARTS is currently generating about -0.42 per unit of risk. If you would invest 965.00 in Astral Foods Limited on September 23, 2024 and sell it today you would lose (10.00) from holding Astral Foods Limited or give up 1.04% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Astral Foods Limited vs. ELECTRONIC ARTS
Performance |
| Timeline |
| Astral Foods Limited |
| ELECTRONIC ARTS |
Astral Foods and ELECTRONIC ARTS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Astral Foods and ELECTRONIC ARTS
The main advantage of trading using opposite Astral Foods and ELECTRONIC ARTS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Astral Foods position performs unexpectedly, ELECTRONIC ARTS 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 ELECTRONIC ARTS will offset losses from the drop in ELECTRONIC ARTS's long position.| Astral Foods vs. Archer Daniels Midland | Astral Foods vs. Tyson Foods | Astral Foods vs. Wilmar International Limited | Astral Foods vs. MOWI ASA SPADR |
| ELECTRONIC ARTS vs. CODERE ONLINE LUX | ELECTRONIC ARTS vs. Astral Foods Limited | ELECTRONIC ARTS vs. PLANT VEDA FOODS | ELECTRONIC ARTS vs. COFCO Joycome 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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