Correlation Between Astral Foods and Allied Electronics
Can any of the company-specific risk be diversified away by investing in both Astral Foods and Allied Electronics 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 Allied Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Astral Foods and Allied Electronics, you can compare the effects of market volatilities on Astral Foods and Allied Electronics 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 Allied Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Astral Foods and Allied Electronics.
Diversification Opportunities for Astral Foods and Allied Electronics
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Astral and Allied is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Astral Foods and Allied Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Allied Electronics 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 are associated (or correlated) with Allied Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Allied Electronics has no effect on the direction of Astral Foods i.e., Astral Foods and Allied Electronics go up and down completely randomly.
Pair Corralation between Astral Foods and Allied Electronics
Assuming the 90 days trading horizon Astral Foods is expected to generate 0.88 times more return on investment than Allied Electronics. However, Astral Foods is 1.14 times less risky than Allied Electronics. It trades about 0.26 of its potential returns per unit of risk. Allied Electronics is currently generating about 0.19 per unit of risk. If you would invest 1,739,500 in Astral Foods on August 31, 2024 and sell it today you would earn a total of 160,500 from holding Astral Foods or generate 9.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Astral Foods vs. Allied Electronics
Performance |
| Timeline |
| Astral Foods |
| Allied Electronics |
Astral Foods and Allied Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Astral Foods and Allied Electronics
The main advantage of trading using opposite Astral Foods and Allied Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Astral Foods position performs unexpectedly, Allied Electronics 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 Allied Electronics will offset losses from the drop in Allied Electronics' long position.| Astral Foods vs. Prosus NV | Astral Foods vs. British American Tobacco | Astral Foods vs. Glencore PLC | Astral Foods vs. Anglo American PLC |
| Allied Electronics vs. Centaur Bci Balanced | Allied Electronics vs. Sabvest Capital | Allied Electronics vs. AfricaRhodium ETF | Allied Electronics vs. Indexco 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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