Correlation Between Astral Foods and Trencor
Can any of the company-specific risk be diversified away by investing in both Astral Foods and Trencor 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 Trencor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Astral Foods and Trencor, you can compare the effects of market volatilities on Astral Foods and Trencor 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 Trencor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Astral Foods and Trencor.
Diversification Opportunities for Astral Foods and Trencor
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Astral and Trencor is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Astral Foods and Trencor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trencor 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 Trencor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trencor has no effect on the direction of Astral Foods i.e., Astral Foods and Trencor go up and down completely randomly.
Pair Corralation between Astral Foods and Trencor
Assuming the 90 days trading horizon Astral Foods is expected to generate 0.93 times more return on investment than Trencor. However, Astral Foods is 1.07 times less risky than Trencor. It trades about 0.3 of its potential returns per unit of risk. Trencor is currently generating about 0.1 per unit of risk. If you would invest 1,718,100 in Astral Foods on September 2, 2024 and sell it today you would earn a total of 181,900 from holding Astral Foods or generate 10.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Astral Foods vs. Trencor
Performance |
| Timeline |
| Astral Foods |
| Trencor |
Astral Foods and Trencor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Astral Foods and Trencor
The main advantage of trading using opposite Astral Foods and Trencor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Astral Foods position performs unexpectedly, Trencor 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 Trencor will offset losses from the drop in Trencor'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 |
| Trencor vs. Harmony Gold Mining | Trencor vs. Blue Label Telecoms | Trencor vs. Brimstone Investment | Trencor vs. Kap Industrial 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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