Correlation Between Astral Foods and City Lodge
Can any of the company-specific risk be diversified away by investing in both Astral Foods and City Lodge 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 City Lodge into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Astral Foods and City Lodge Hotels, you can compare the effects of market volatilities on Astral Foods and City Lodge 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 City Lodge. Check out your portfolio center. Please also check ongoing floating volatility patterns of Astral Foods and City Lodge.
Diversification Opportunities for Astral Foods and City Lodge
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Astral and City is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Astral Foods and City Lodge Hotels in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on City Lodge Hotels 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 City Lodge. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of City Lodge Hotels has no effect on the direction of Astral Foods i.e., Astral Foods and City Lodge go up and down completely randomly.
Pair Corralation between Astral Foods and City Lodge
Assuming the 90 days trading horizon Astral Foods is expected to generate 43.7 times more return on investment than City Lodge. However, Astral Foods is 43.7 times more volatile than City Lodge Hotels. It trades about 0.07 of its potential returns per unit of risk. City Lodge Hotels is currently generating about 0.01 per unit of risk. If you would invest 1,600,000 in Astral Foods on August 27, 2024 and sell it today you would earn a total of 298,700 from holding Astral Foods or generate 18.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.34% |
| Values | Daily Returns |
Astral Foods vs. City Lodge Hotels
Performance |
| Timeline |
| Astral Foods |
| City Lodge Hotels |
Astral Foods and City Lodge Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Astral Foods and City Lodge
The main advantage of trading using opposite Astral Foods and City Lodge positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Astral Foods position performs unexpectedly, City Lodge 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 City Lodge will offset losses from the drop in City Lodge's long position.| Astral Foods vs. Quantum Foods Holdings | Astral Foods vs. RCL Foods | Astral Foods vs. Trellidor Holdings | Astral Foods vs. Prosus NV |
| City Lodge vs. Prosus NV | City Lodge vs. Compagnie Financire Richemont | City Lodge vs. British American Tobacco | City Lodge vs. Glencore PLC |
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 Stocks Directory module to find actively traded stocks across global markets.
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