Correlation Between Astral Foods and Standard Bank
Can any of the company-specific risk be diversified away by investing in both Astral Foods and Standard 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 Standard 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 Standard Bank Group, you can compare the effects of market volatilities on Astral Foods and Standard 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 Standard Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Astral Foods and Standard Bank.
Diversification Opportunities for Astral Foods and Standard Bank
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Astral and Standard is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Astral Foods and Standard Bank Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Standard Bank Group 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 Standard Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Standard Bank Group has no effect on the direction of Astral Foods i.e., Astral Foods and Standard Bank go up and down completely randomly.
Pair Corralation between Astral Foods and Standard Bank
Assuming the 90 days trading horizon Astral Foods is expected to generate 0.96 times more return on investment than Standard Bank. However, Astral Foods is 1.04 times less risky than Standard Bank. It trades about 0.31 of its potential returns per unit of risk. Standard Bank Group is currently generating about 0.05 per unit of risk. If you would invest 1,717,100 in Astral Foods on August 25, 2024 and sell it today you would earn a total of 181,600 from holding Astral Foods or generate 10.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Astral Foods vs. Standard Bank Group
Performance |
| Timeline |
| Astral Foods |
| Standard Bank Group |
Astral Foods and Standard Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Astral Foods and Standard Bank
The main advantage of trading using opposite Astral Foods and Standard Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Astral Foods position performs unexpectedly, Standard 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 Standard Bank will offset losses from the drop in Standard 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 |
| Standard Bank vs. Advtech | Standard Bank vs. Astral Foods | Standard Bank vs. Reinet Investments SCA | Standard Bank 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
Other Complementary Tools
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios |