Correlation Between Compagnie Financire and Astral Foods

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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

CompagnieAstralDiversified AwayCompagnieAstralDiversified Away100%
-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 Period3 Months [change]
DirectionMoves Against 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Compagnie Financire Richemont  vs.  Astral Foods

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -1001020304050
JavaScript chart by amCharts 3.21.15CFR ARL
       Timeline  
Compagnie Financire 

Risk-Adjusted Performance

Solid

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Compagnie Financire Richemont are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Compagnie Financire exhibited solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15JanFebFebMar260,000280,000300,000320,000340,000360,000380,000
Astral Foods 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Astral Foods has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.
JavaScript chart by amCharts 3.21.15JanFebFebMar16,50017,00017,50018,00018,50019,00019,500

Compagnie Financire and Astral Foods Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-6.64-4.97-3.3-1.640.01.893.825.757.67 0.050.100.150.20
JavaScript chart by amCharts 3.21.15CFR ARL
       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.
The idea behind Compagnie Financire Richemont and Astral Foods pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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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