Correlation Between Astral Foods and SA Corporate
Can any of the company-specific risk be diversified away by investing in both Astral Foods and SA Corporate 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 SA Corporate into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Astral Foods and SA Corporate Real, you can compare the effects of market volatilities on Astral Foods and SA Corporate 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 SA Corporate. Check out your portfolio center. Please also check ongoing floating volatility patterns of Astral Foods and SA Corporate.
Diversification Opportunities for Astral Foods and SA Corporate
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Astral and SAC is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Astral Foods and SA Corporate Real in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SA Corporate Real 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 SA Corporate. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SA Corporate Real has no effect on the direction of Astral Foods i.e., Astral Foods and SA Corporate go up and down completely randomly.
Pair Corralation between Astral Foods and SA Corporate
Assuming the 90 days trading horizon Astral Foods is expected to generate 0.95 times more return on investment than SA Corporate. However, Astral Foods is 1.05 times less risky than SA Corporate. It trades about 0.26 of its potential returns per unit of risk. SA Corporate Real is currently generating about 0.02 per unit of risk. If you would invest 1,739,500 in Astral Foods on August 31, 2024 and sell it today you would earn a total of 160,500 from holding Astral Foods or generate 9.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Astral Foods vs. SA Corporate Real
Performance |
| Timeline |
| Astral Foods |
| SA Corporate Real |
Astral Foods and SA Corporate Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Astral Foods and SA Corporate
The main advantage of trading using opposite Astral Foods and SA Corporate positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Astral Foods position performs unexpectedly, SA Corporate 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 SA Corporate will offset losses from the drop in SA Corporate'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 |
| SA Corporate vs. Safari Investments RSA | SA Corporate vs. Datatec | SA Corporate vs. Advtech | SA Corporate vs. Astoria 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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