Correlation Between ASTRA INTERNATIONAL and Shoprite Holdings
Can any of the company-specific risk be diversified away by investing in both ASTRA INTERNATIONAL and Shoprite Holdings 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 ASTRA INTERNATIONAL and Shoprite Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ASTRA INTERNATIONAL and Shoprite Holdings Limited, you can compare the effects of market volatilities on ASTRA INTERNATIONAL and Shoprite Holdings 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 ASTRA INTERNATIONAL with a short position of Shoprite Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of ASTRA INTERNATIONAL and Shoprite Holdings.
Diversification Opportunities for ASTRA INTERNATIONAL and Shoprite Holdings
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ASTRA and Shoprite is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding ASTRA INTERNATIONAL and Shoprite Holdings Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shoprite Holdings and ASTRA INTERNATIONAL 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 ASTRA INTERNATIONAL are associated (or correlated) with Shoprite Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shoprite Holdings has no effect on the direction of ASTRA INTERNATIONAL i.e., ASTRA INTERNATIONAL and Shoprite Holdings go up and down completely randomly.
Pair Corralation between ASTRA INTERNATIONAL and Shoprite Holdings
Assuming the 90 days trading horizon ASTRA INTERNATIONAL is expected to generate 1.69 times less return on investment than Shoprite Holdings. In addition to that, ASTRA INTERNATIONAL is 1.57 times more volatile than Shoprite Holdings Limited. It trades about 0.05 of its total potential returns per unit of risk. Shoprite Holdings Limited is currently generating about 0.14 per unit of volatility. If you would invest 860.00 in Shoprite Holdings Limited on September 1, 2024 and sell it today you would earn a total of 690.00 from holding Shoprite Holdings Limited or generate 80.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.24% |
| Values | Daily Returns |
ASTRA INTERNATIONAL vs. Shoprite Holdings Limited
Performance |
| Timeline |
| ASTRA INTERNATIONAL |
| Shoprite Holdings |
ASTRA INTERNATIONAL and Shoprite Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ASTRA INTERNATIONAL and Shoprite Holdings
The main advantage of trading using opposite ASTRA INTERNATIONAL and Shoprite Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ASTRA INTERNATIONAL position performs unexpectedly, Shoprite Holdings 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 Shoprite Holdings will offset losses from the drop in Shoprite Holdings' long position.| ASTRA INTERNATIONAL vs. Boiron SA | ASTRA INTERNATIONAL vs. UNIVMUSIC GRPADR050 | ASTRA INTERNATIONAL vs. CECO ENVIRONMENTAL | ASTRA INTERNATIONAL vs. Insteel Industries |
| Shoprite Holdings vs. AIR PRODCHEMICALS | Shoprite Holdings vs. PTT Global Chemical | Shoprite Holdings vs. Silicon Motion Technology | Shoprite Holdings vs. BRIT AMER TOBACCO |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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