Correlation Between AUST AGRICULTURAL and Astral Foods
Can any of the company-specific risk be diversified away by investing in both AUST AGRICULTURAL and Astral Foods 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 AUST AGRICULTURAL and Astral Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AUST AGRICULTURAL and Astral Foods Limited, you can compare the effects of market volatilities on AUST AGRICULTURAL and Astral Foods 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 AUST AGRICULTURAL with a short position of Astral Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of AUST AGRICULTURAL and Astral Foods.
Diversification Opportunities for AUST AGRICULTURAL and Astral Foods
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between AUST and Astral is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding AUST AGRICULTURAL and Astral Foods Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Astral Foods Limited and AUST AGRICULTURAL 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 AUST AGRICULTURAL are associated (or correlated) with Astral Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Astral Foods Limited has no effect on the direction of AUST AGRICULTURAL i.e., AUST AGRICULTURAL and Astral Foods go up and down completely randomly.
Pair Corralation between AUST AGRICULTURAL and Astral Foods
Assuming the 90 days trading horizon AUST AGRICULTURAL is expected to generate 4.36 times less return on investment than Astral Foods. But when comparing it to its historical volatility, AUST AGRICULTURAL is 1.26 times less risky than Astral Foods. It trades about 0.02 of its potential returns per unit of risk. Astral Foods Limited is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 720.00 in Astral Foods Limited on September 1, 2024 and sell it today you would earn a total of 230.00 from holding Astral Foods Limited or generate 31.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AUST AGRICULTURAL vs. Astral Foods Limited
Performance |
| Timeline |
| AUST AGRICULTURAL |
| Astral Foods Limited |
AUST AGRICULTURAL and Astral Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AUST AGRICULTURAL and Astral Foods
The main advantage of trading using opposite AUST AGRICULTURAL and Astral Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AUST AGRICULTURAL position performs unexpectedly, Astral Foods 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 Astral Foods will offset losses from the drop in Astral Foods' long position.| AUST AGRICULTURAL vs. SIVERS SEMICONDUCTORS AB | AUST AGRICULTURAL vs. Darden Restaurants | AUST AGRICULTURAL vs. Reliance Steel Aluminum | AUST AGRICULTURAL vs. Q2M Managementberatung AG |
| Astral Foods vs. EAT WELL INVESTMENT | Astral Foods vs. Apollo Investment Corp | Astral Foods vs. CHINA OIL AND | Astral Foods vs. New Residential Investment |
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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