Correlation Between Astral Foods and Oando PLC
Can any of the company-specific risk be diversified away by investing in both Astral Foods and Oando PLC 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 Oando PLC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Astral Foods and Oando PLC, you can compare the effects of market volatilities on Astral Foods and Oando PLC 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 Oando PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Astral Foods and Oando PLC.
Diversification Opportunities for Astral Foods and Oando PLC
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Astral and Oando is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Astral Foods and Oando PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oando PLC 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 Oando PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oando PLC has no effect on the direction of Astral Foods i.e., Astral Foods and Oando PLC go up and down completely randomly.
Pair Corralation between Astral Foods and Oando PLC
Assuming the 90 days trading horizon Astral Foods is expected to generate 6.0 times more return on investment than Oando PLC. However, Astral Foods is 6.0 times more volatile than Oando PLC. It trades about 0.08 of its potential returns per unit of risk. Oando PLC is currently generating about 0.07 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 | Very Weak |
| Accuracy | 99.24% |
| Values | Daily Returns |
Astral Foods vs. Oando PLC
Performance |
| Timeline |
| Astral Foods |
| Oando PLC |
Astral Foods and Oando PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Astral Foods and Oando PLC
The main advantage of trading using opposite Astral Foods and Oando PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Astral Foods position performs unexpectedly, Oando PLC 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 Oando PLC will offset losses from the drop in Oando PLC'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 |
| Oando PLC vs. Reinet Investments SCA | Oando PLC vs. African Media Entertainment | Oando PLC vs. Zeder Investments | Oando PLC vs. Capitec Bank 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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