Correlation Between Astra Agro and Local Bounti
Can any of the company-specific risk be diversified away by investing in both Astra Agro and Local Bounti 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 Local Bounti 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 Local Bounti Corp, you can compare the effects of market volatilities on Astra Agro and Local Bounti 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 Local Bounti. Check out your portfolio center. Please also check ongoing floating volatility patterns of Astra Agro and Local Bounti.
Diversification Opportunities for Astra Agro and Local Bounti
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Astra and Local is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Astra Agro Lestari and Local Bounti Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Local Bounti Corp 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 Local Bounti. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Local Bounti Corp has no effect on the direction of Astra Agro i.e., Astra Agro and Local Bounti go up and down completely randomly.
Pair Corralation between Astra Agro and Local Bounti
If you would invest 209.00 in Local Bounti Corp on October 26, 2024 and sell it today you would earn a total of 5.00 from holding Local Bounti Corp or generate 2.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 5.56% |
| Values | Daily Returns |
Astra Agro Lestari vs. Local Bounti Corp
Performance |
| Timeline |
| Astra Agro Lestari |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Local Bounti Corp |
Astra Agro and Local Bounti Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Astra Agro and Local Bounti
The main advantage of trading using opposite Astra Agro and Local Bounti positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Astra Agro position performs unexpectedly, Local Bounti 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 Local Bounti will offset losses from the drop in Local Bounti'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 |
| Local Bounti vs. Fresh Del Monte | Local Bounti vs. Alico Inc | Local Bounti vs. SW Seed Company | Local Bounti vs. Adecoagro SA |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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