Correlation Between Astra Agro and GrainCorp
Can any of the company-specific risk be diversified away by investing in both Astra Agro and GrainCorp 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 Astra Agro and GrainCorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Astra Agro Lestari and GrainCorp Limited, you can compare the effects of market volatilities on Astra Agro and GrainCorp 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 Astra Agro with a short position of GrainCorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Astra Agro and GrainCorp.
Diversification Opportunities for Astra Agro and GrainCorp
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Astra and GrainCorp is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Astra Agro Lestari and GrainCorp Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GrainCorp Limited and Astra Agro 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 Astra Agro Lestari are associated (or correlated) with GrainCorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GrainCorp Limited has no effect on the direction of Astra Agro i.e., Astra Agro and GrainCorp go up and down completely randomly.
Pair Corralation between Astra Agro and GrainCorp
If you would invest 179.00 in Astra Agro Lestari on August 31, 2024 and sell it today you would earn a total of 0.00 from holding Astra Agro Lestari or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 4.55% |
| Values | Daily Returns |
Astra Agro Lestari vs. GrainCorp Limited
Performance |
| Timeline |
| Astra Agro Lestari |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| GrainCorp Limited |
Astra Agro and GrainCorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Astra Agro and GrainCorp
The main advantage of trading using opposite Astra Agro and GrainCorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Astra Agro position performs unexpectedly, GrainCorp 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 GrainCorp will offset losses from the drop in GrainCorp's long position.| Astra Agro vs. Forafric Global PLC | Astra Agro vs. Forafric Global PLC | Astra Agro vs. Australian Agricultural | Astra Agro vs. Limoneira Co |
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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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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