Correlation Between Shimano and Astral Foods
Can any of the company-specific risk be diversified away by investing in both Shimano 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 Shimano and Astral Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shimano and Astral Foods Limited, you can compare the effects of market volatilities on Shimano 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 Shimano with a short position of Astral Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shimano and Astral Foods.
Diversification Opportunities for Shimano and Astral Foods
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Shimano and Astral is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Shimano 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 Shimano 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 Shimano 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 Shimano i.e., Shimano and Astral Foods go up and down completely randomly.
Pair Corralation between Shimano and Astral Foods
Assuming the 90 days horizon Shimano is expected to under-perform the Astral Foods. But the stock apears to be less risky and, when comparing its historical volatility, Shimano is 5.32 times less risky than Astral Foods. The stock trades about -0.01 of its potential returns per unit of risk. The Astral Foods Limited is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 905.00 in Astral Foods Limited on September 3, 2024 and sell it today you would earn a total of 45.00 from holding Astral Foods Limited or generate 4.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shimano vs. Astral Foods Limited
Performance |
| Timeline |
| Shimano |
| Astral Foods Limited |
Shimano and Astral Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shimano and Astral Foods
The main advantage of trading using opposite Shimano and Astral Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shimano 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.| Shimano vs. G8 EDUCATION | Shimano vs. STRAYER EDUCATION | Shimano vs. Digilife Technologies Limited | Shimano vs. Axcelis Technologies |
| 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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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