Correlation Between Capcom Co and Astral Foods
Can any of the company-specific risk be diversified away by investing in both Capcom Co 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 Capcom Co and Astral Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capcom Co and Astral Foods Limited, you can compare the effects of market volatilities on Capcom Co 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 Capcom Co with a short position of Astral Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capcom Co and Astral Foods.
Diversification Opportunities for Capcom Co and Astral Foods
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Capcom and Astral is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Capcom Co 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 Capcom Co 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 Capcom Co 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 Capcom Co i.e., Capcom Co and Astral Foods go up and down completely randomly.
Pair Corralation between Capcom Co and Astral Foods
Assuming the 90 days horizon Capcom Co is expected to generate 1.7 times more return on investment than Astral Foods. However, Capcom Co is 1.7 times more volatile than Astral Foods Limited. It trades about 0.13 of its potential returns per unit of risk. Astral Foods Limited is currently generating about -0.1 per unit of risk. If you would invest 2,241 in Capcom Co on December 4, 2024 and sell it today you would earn a total of 172.00 from holding Capcom Co or generate 7.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Capcom Co vs. Astral Foods Limited
Performance |
| Timeline |
| Capcom Co |
| Astral Foods Limited |
Capcom Co and Astral Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capcom Co and Astral Foods
The main advantage of trading using opposite Capcom Co and Astral Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capcom Co 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.| Capcom Co vs. BROADSTNET LEADL 00025 | Capcom Co vs. Kingdee International Software | Capcom Co vs. AXWAY SOFTWARE EO | Capcom Co vs. FORMPIPE SOFTWARE AB |
| Astral Foods vs. URBAN OUTFITTERS | Astral Foods vs. American Eagle Outfitters | Astral Foods vs. OFFICE DEPOT | Astral Foods vs. DeVry Education Group |
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 Valuation module to check real value of public entities based on technical and fundamental data.
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