Correlation Between Astral Foods and INDIKA ENERGY
Can any of the company-specific risk be diversified away by investing in both Astral Foods and INDIKA ENERGY 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 INDIKA ENERGY 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 INDIKA ENERGY, you can compare the effects of market volatilities on Astral Foods and INDIKA ENERGY 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 INDIKA ENERGY. Check out your portfolio center. Please also check ongoing floating volatility patterns of Astral Foods and INDIKA ENERGY.
Diversification Opportunities for Astral Foods and INDIKA ENERGY
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Astral and INDIKA is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Astral Foods Limited and INDIKA ENERGY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INDIKA ENERGY 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 INDIKA ENERGY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INDIKA ENERGY has no effect on the direction of Astral Foods i.e., Astral Foods and INDIKA ENERGY go up and down completely randomly.
Pair Corralation between Astral Foods and INDIKA ENERGY
Assuming the 90 days trading horizon Astral Foods Limited is expected to generate 2.81 times more return on investment than INDIKA ENERGY. However, Astral Foods is 2.81 times more volatile than INDIKA ENERGY. It trades about 0.03 of its potential returns per unit of risk. INDIKA ENERGY is currently generating about -0.02 per unit of risk. If you would invest 905.00 in Astral Foods Limited on September 3, 2024 and sell it today you would earn a total of 35.00 from holding Astral Foods Limited or generate 3.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Astral Foods Limited vs. INDIKA ENERGY
Performance |
| Timeline |
| Astral Foods Limited |
| INDIKA ENERGY |
Astral Foods and INDIKA ENERGY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Astral Foods and INDIKA ENERGY
The main advantage of trading using opposite Astral Foods and INDIKA ENERGY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Astral Foods position performs unexpectedly, INDIKA ENERGY 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 INDIKA ENERGY will offset losses from the drop in INDIKA ENERGY's long position.| Astral Foods vs. Archer Daniels Midland | Astral Foods vs. Tyson Foods | Astral Foods vs. Wilmar International Limited | Astral Foods vs. SalMar ASA |
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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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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