Correlation Between Astral Foods and NEXANS
Can any of the company-specific risk be diversified away by investing in both Astral Foods and NEXANS 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 NEXANS 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 NEXANS, you can compare the effects of market volatilities on Astral Foods and NEXANS 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 NEXANS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Astral Foods and NEXANS.
Diversification Opportunities for Astral Foods and NEXANS
-0.67 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Astral and NEXANS is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Astral Foods Limited and NEXANS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NEXANS 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 NEXANS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NEXANS has no effect on the direction of Astral Foods i.e., Astral Foods and NEXANS go up and down completely randomly.
Pair Corralation between Astral Foods and NEXANS
Assuming the 90 days trading horizon Astral Foods Limited is expected to generate 1.44 times more return on investment than NEXANS. However, Astral Foods is 1.44 times more volatile than NEXANS. It trades about 0.02 of its potential returns per unit of risk. NEXANS is currently generating about 0.02 per unit of risk. If you would invest 890.00 in Astral Foods Limited on October 14, 2024 and sell it today you would earn a total of 25.00 from holding Astral Foods Limited or generate 2.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Astral Foods Limited vs. NEXANS
Performance |
| Timeline |
| Astral Foods Limited |
| NEXANS |
Astral Foods and NEXANS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Astral Foods and NEXANS
The main advantage of trading using opposite Astral Foods and NEXANS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Astral Foods position performs unexpectedly, NEXANS 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 NEXANS will offset losses from the drop in NEXANS's long position.| Astral Foods vs. Ares Management Corp | Astral Foods vs. Nippon Light Metal | Astral Foods vs. CEOTRONICS | Astral Foods vs. AEON METALS LTD |
| NEXANS vs. MOLSON RS BEVERAGE | NEXANS vs. Scottish Mortgage Investment | NEXANS vs. CN MODERN DAIRY | NEXANS 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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