Correlation Between Compagnie Financire and Astral Foods
Can any of the company-specific risk be diversified away by investing in both Compagnie Financire 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 Compagnie Financire and Astral Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Compagnie Financire Richemont and Astral Foods, you can compare the effects of market volatilities on Compagnie Financire 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 Compagnie Financire with a short position of Astral Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Compagnie Financire and Astral Foods.
Diversification Opportunities for Compagnie Financire and Astral Foods
-0.86 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Compagnie and Astral is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding Compagnie Financire Richemont and Astral Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Astral Foods and Compagnie Financire 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 Compagnie Financire Richemont 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 has no effect on the direction of Compagnie Financire i.e., Compagnie Financire and Astral Foods go up and down completely randomly.
Pair Corralation between Compagnie Financire and Astral Foods
Assuming the 90 days trading horizon Compagnie Financire Richemont is expected to generate 1.02 times more return on investment than Astral Foods. However, Compagnie Financire is 1.02 times more volatile than Astral Foods. It trades about 0.21 of its potential returns per unit of risk. Astral Foods is currently generating about -0.12 per unit of risk. If you would invest 35,882,600 in Compagnie Financire Richemont on December 4, 2024 and sell it today you would earn a total of 2,250,700 from holding Compagnie Financire Richemont or generate 6.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Compagnie Financire Richemont vs. Astral Foods
Performance |
| Timeline |
| Compagnie Financire |
| Astral Foods |
Compagnie Financire and Astral Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Compagnie Financire and Astral Foods
The main advantage of trading using opposite Compagnie Financire and Astral Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Compagnie Financire 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.| Compagnie Financire vs. We Buy Cars | ||
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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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