Correlation Between Astral Foods and Dalata Hotel

Can any of the company-specific risk be diversified away by investing in both Astral Foods and Dalata Hotel 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 Astral Foods and Dalata Hotel into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Astral Foods Limited and Dalata Hotel Group, you can compare the effects of market volatilities on Astral Foods and Dalata Hotel 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 Astral Foods with a short position of Dalata Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Astral Foods and Dalata Hotel.

Diversification Opportunities for Astral Foods and Dalata Hotel

0.15

Correlation Coefficient

Astral Foods  Dalata Hotel

Average diversification

The 3 months correlation between Astral and Dalata is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Astral Foods Limited and Dalata Hotel Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dalata Hotel Group and Astral Foods 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 Astral Foods Limited are associated (or correlated) with Dalata Hotel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dalata Hotel Group has no effect on the direction of Astral Foods i.e., Astral Foods and Dalata Hotel go up and down completely randomly.

Pair Corralation between Astral Foods and Dalata Hotel

Assuming the 90 days trading horizon Astral Foods is expected to generate 2.36 times less return on investment than Dalata Hotel. But when comparing it to its historical volatility, Astral Foods Limited is 1.18 times less risky than Dalata Hotel. It trades about 0.05 of its potential returns per unit of risk. Dalata Hotel Group is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  411.00  in Dalata Hotel Group on September 23, 2024 and sell it today you would earn a total of  47.00  from holding Dalata Hotel Group or generate 11.44% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Astral Foods Limited  vs.  Dalata Hotel Group

Astral Foods Limited

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Astral Foods Limited are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Astral Foods is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Dalata Hotel Group

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Dalata Hotel Group are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Dalata Hotel may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Astral Foods and Dalata Hotel

The main advantage of trading using opposite Astral Foods and Dalata Hotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Astral Foods position performs unexpectedly, Dalata Hotel 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 Dalata Hotel will offset losses from the drop in Dalata Hotel's long position.

The idea behind Astral Foods Limited and Dalata Hotel Group 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.

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.