Correlation Between Astral Foods and COMMERCIAL VEHICLE
Can any of the company-specific risk be diversified away by investing in both Astral Foods and COMMERCIAL VEHICLE 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 COMMERCIAL VEHICLE 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 COMMERCIAL VEHICLE, you can compare the effects of market volatilities on Astral Foods and COMMERCIAL VEHICLE 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 COMMERCIAL VEHICLE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Astral Foods and COMMERCIAL VEHICLE.
Diversification Opportunities for Astral Foods and COMMERCIAL VEHICLE
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Astral and COMMERCIAL is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Astral Foods Limited and COMMERCIAL VEHICLE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COMMERCIAL VEHICLE 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 COMMERCIAL VEHICLE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COMMERCIAL VEHICLE has no effect on the direction of Astral Foods i.e., Astral Foods and COMMERCIAL VEHICLE go up and down completely randomly.
Pair Corralation between Astral Foods and COMMERCIAL VEHICLE
Assuming the 90 days trading horizon Astral Foods Limited is expected to generate 0.36 times more return on investment than COMMERCIAL VEHICLE. However, Astral Foods Limited is 2.79 times less risky than COMMERCIAL VEHICLE. It trades about 0.14 of its potential returns per unit of risk. COMMERCIAL VEHICLE is currently generating about -0.1 per unit of risk. If you would invest 830.00 in Astral Foods Limited on September 2, 2024 and sell it today you would earn a total of 120.00 from holding Astral Foods Limited or generate 14.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Astral Foods Limited vs. COMMERCIAL VEHICLE
Performance |
| Timeline |
| Astral Foods Limited |
| COMMERCIAL VEHICLE |
Astral Foods and COMMERCIAL VEHICLE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Astral Foods and COMMERCIAL VEHICLE
The main advantage of trading using opposite Astral Foods and COMMERCIAL VEHICLE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Astral Foods position performs unexpectedly, COMMERCIAL VEHICLE 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 COMMERCIAL VEHICLE will offset losses from the drop in COMMERCIAL VEHICLE's long position.| Astral Foods vs. Vastned Retail NV | Astral Foods vs. TFS FINANCIAL | Astral Foods vs. Heartland Financial USA | Astral Foods vs. Mizuho Financial Group |
| COMMERCIAL VEHICLE vs. National Retail Properties | COMMERCIAL VEHICLE vs. Tsingtao Brewery | COMMERCIAL VEHICLE vs. Caseys General Stores | COMMERCIAL VEHICLE vs. AEON STORES |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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