Correlation Between CHINA OIL and Astral Foods
Can any of the company-specific risk be diversified away by investing in both CHINA OIL 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 CHINA OIL and Astral Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CHINA OIL AND and Astral Foods Limited, you can compare the effects of market volatilities on CHINA OIL 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 CHINA OIL with a short position of Astral Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of CHINA OIL and Astral Foods.
Diversification Opportunities for CHINA OIL and Astral Foods
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between CHINA and Astral is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding CHINA OIL AND 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 CHINA OIL 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 CHINA OIL AND 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 CHINA OIL i.e., CHINA OIL and Astral Foods go up and down completely randomly.
Pair Corralation between CHINA OIL and Astral Foods
If you would invest 860.00 in Astral Foods Limited on September 3, 2024 and sell it today you would earn a total of 90.00 from holding Astral Foods Limited or generate 10.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CHINA OIL AND vs. Astral Foods Limited
Performance |
| Timeline |
| CHINA OIL AND |
| Astral Foods Limited |
CHINA OIL and Astral Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CHINA OIL and Astral Foods
The main advantage of trading using opposite CHINA OIL and Astral Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CHINA OIL 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.| CHINA OIL vs. INSURANCE AUST GRP | CHINA OIL vs. SCANSOURCE | CHINA OIL vs. Japan Post Insurance | CHINA OIL vs. QBE Insurance Group |
| Astral Foods vs. Archer Daniels Midland | Astral Foods vs. Tyson Foods | Astral Foods vs. Wilmar International Limited | Astral Foods vs. SalMar ASA |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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