Correlation Between Astral Foods and Firstrand
Can any of the company-specific risk be diversified away by investing in both Astral Foods and Firstrand 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 Firstrand into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Astral Foods and Firstrand, you can compare the effects of market volatilities on Astral Foods and Firstrand 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 Firstrand. Check out your portfolio center. Please also check ongoing floating volatility patterns of Astral Foods and Firstrand.
Diversification Opportunities for Astral Foods and Firstrand
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Astral and Firstrand is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Astral Foods and Firstrand in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Firstrand 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 Firstrand. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Firstrand has no effect on the direction of Astral Foods i.e., Astral Foods and Firstrand go up and down completely randomly.
Pair Corralation between Astral Foods and Firstrand
Assuming the 90 days trading horizon Astral Foods is expected to generate 56.81 times more return on investment than Firstrand. However, Astral Foods is 56.81 times more volatile than Firstrand. It trades about 0.08 of its potential returns per unit of risk. Firstrand is currently generating about 0.06 per unit of risk. If you would invest 1,695,600 in Astral Foods on August 31, 2024 and sell it today you would earn a total of 204,400 from holding Astral Foods or generate 12.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.49% |
| Values | Daily Returns |
Astral Foods vs. Firstrand
Performance |
| Timeline |
| Astral Foods |
| Firstrand |
Astral Foods and Firstrand Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Astral Foods and Firstrand
The main advantage of trading using opposite Astral Foods and Firstrand positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Astral Foods position performs unexpectedly, Firstrand 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 Firstrand will offset losses from the drop in Firstrand's long position.| Astral Foods vs. Prosus NV | Astral Foods vs. British American Tobacco | Astral Foods vs. Glencore PLC | Astral Foods vs. Anglo American PLC |
| Firstrand vs. Capitec Bank Holdings | Firstrand vs. Reinet Investments SCA | Firstrand vs. Astral Foods | Firstrand vs. HomeChoice Investments |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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