Correlation Between Astral Foods and Frontier Transport
Can any of the company-specific risk be diversified away by investing in both Astral Foods and Frontier Transport 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 Frontier Transport into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Astral Foods and Frontier Transport Holdings, you can compare the effects of market volatilities on Astral Foods and Frontier Transport 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 Frontier Transport. Check out your portfolio center. Please also check ongoing floating volatility patterns of Astral Foods and Frontier Transport.
Diversification Opportunities for Astral Foods and Frontier Transport
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Astral and Frontier is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Astral Foods and Frontier Transport Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Frontier Transport 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 Frontier Transport. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Frontier Transport has no effect on the direction of Astral Foods i.e., Astral Foods and Frontier Transport go up and down completely randomly.
Pair Corralation between Astral Foods and Frontier Transport
Assuming the 90 days trading horizon Astral Foods is expected to generate 0.2 times more return on investment than Frontier Transport. However, Astral Foods is 5.07 times less risky than Frontier Transport. It trades about 0.19 of its potential returns per unit of risk. Frontier Transport Holdings is currently generating about -0.08 per unit of risk. If you would invest 1,725,000 in Astral Foods on August 24, 2024 and sell it today you would earn a total of 75,000 from holding Astral Foods or generate 4.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Astral Foods vs. Frontier Transport Holdings
Performance |
| Timeline |
| Astral Foods |
| Frontier Transport |
Astral Foods and Frontier Transport Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Astral Foods and Frontier Transport
The main advantage of trading using opposite Astral Foods and Frontier Transport positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Astral Foods position performs unexpectedly, Frontier Transport 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 Frontier Transport will offset losses from the drop in Frontier Transport'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 |
| Frontier Transport vs. Centaur Bci Balanced | Frontier Transport vs. Growthpoint Properties | Frontier Transport vs. Bowler Metcalf | Frontier Transport vs. Shoprite Holdings |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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