Correlation Between Astral Foods and Capitec Bank
Can any of the company-specific risk be diversified away by investing in both Astral Foods and Capitec Bank 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 Capitec Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Astral Foods and Capitec Bank Holdings, you can compare the effects of market volatilities on Astral Foods and Capitec Bank 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 Capitec Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Astral Foods and Capitec Bank.
Diversification Opportunities for Astral Foods and Capitec Bank
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between Astral and Capitec is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Astral Foods and Capitec Bank Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capitec Bank Holdings 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 Capitec Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capitec Bank Holdings has no effect on the direction of Astral Foods i.e., Astral Foods and Capitec Bank go up and down completely randomly.
Pair Corralation between Astral Foods and Capitec Bank
Assuming the 90 days trading horizon Astral Foods is expected to generate 46.12 times more return on investment than Capitec Bank. However, Astral Foods is 46.12 times more volatile than Capitec Bank Holdings. It trades about 0.07 of its potential returns per unit of risk. Capitec Bank Holdings is currently generating about 0.08 per unit of risk. If you would invest 1,593,300 in Astral Foods on November 2, 2024 and sell it today you would earn a total of 195,500 from holding Astral Foods or generate 12.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.39% |
| Values | Daily Returns |
Astral Foods vs. Capitec Bank Holdings
Performance |
| Timeline |
| Astral Foods |
| Capitec Bank Holdings |
Astral Foods and Capitec Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Astral Foods and Capitec Bank
The main advantage of trading using opposite Astral Foods and Capitec Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Astral Foods position performs unexpectedly, Capitec Bank 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 Capitec Bank will offset losses from the drop in Capitec Bank's long position.| Astral Foods vs. Prosus NV | Astral Foods vs. Compagnie Financire Richemont | Astral Foods vs. British American Tobacco | Astral Foods vs. Glencore PLC |
| Capitec Bank vs. Master Drilling Group | Capitec Bank vs. Life Healthcare | Capitec Bank vs. Frontier Transport Holdings | Capitec Bank vs. Astral Foods |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
Other Complementary Tools
| Stocks Directory Find actively traded stocks across global markets | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals |