Correlation Between Astral Foods and INDOFOOD AGRI
Can any of the company-specific risk be diversified away by investing in both Astral Foods and INDOFOOD AGRI 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 INDOFOOD AGRI 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 INDOFOOD AGRI RES, you can compare the effects of market volatilities on Astral Foods and INDOFOOD AGRI 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 INDOFOOD AGRI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Astral Foods and INDOFOOD AGRI.
Diversification Opportunities for Astral Foods and INDOFOOD AGRI
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Astral and INDOFOOD is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Astral Foods Limited and INDOFOOD AGRI RES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INDOFOOD AGRI RES 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 INDOFOOD AGRI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INDOFOOD AGRI RES has no effect on the direction of Astral Foods i.e., Astral Foods and INDOFOOD AGRI go up and down completely randomly.
Pair Corralation between Astral Foods and INDOFOOD AGRI
Assuming the 90 days trading horizon Astral Foods is expected to generate 1.03 times less return on investment than INDOFOOD AGRI. But when comparing it to its historical volatility, Astral Foods Limited is 1.26 times less risky than INDOFOOD AGRI. It trades about 0.08 of its potential returns per unit of risk. INDOFOOD AGRI RES is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 17.00 in INDOFOOD AGRI RES on August 25, 2024 and sell it today you would earn a total of 5.00 from holding INDOFOOD AGRI RES or generate 29.41% 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. INDOFOOD AGRI RES
Performance |
| Timeline |
| Astral Foods Limited |
| INDOFOOD AGRI RES |
Astral Foods and INDOFOOD AGRI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Astral Foods and INDOFOOD AGRI
The main advantage of trading using opposite Astral Foods and INDOFOOD AGRI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Astral Foods position performs unexpectedly, INDOFOOD AGRI 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 INDOFOOD AGRI will offset losses from the drop in INDOFOOD AGRI's long position.| Astral Foods vs. Charoen Pokphand Foods | Astral Foods vs. Superior Plus Corp | Astral Foods vs. NMI Holdings | Astral Foods vs. Origin Agritech |
| INDOFOOD AGRI vs. SBA Communications Corp | INDOFOOD AGRI vs. SK TELECOM TDADR | INDOFOOD AGRI vs. Singapore Telecommunications Limited | INDOFOOD AGRI vs. Shenandoah Telecommunications |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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