Correlation Between Astral Foods and HEALTHCARE REAL

Can any of the company-specific risk be diversified away by investing in both Astral Foods and HEALTHCARE REAL 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 HEALTHCARE REAL 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 HEALTHCARE REAL A, you can compare the effects of market volatilities on Astral Foods and HEALTHCARE REAL 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 HEALTHCARE REAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Astral Foods and HEALTHCARE REAL.

Diversification Opportunities for Astral Foods and HEALTHCARE REAL

0.3

Correlation Coefficient

Astral Foods  HEALTHCARE REAL

Weak diversification

The 3 months correlation between Astral and HEALTHCARE is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Astral Foods Limited and HEALTHCARE REAL A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HEALTHCARE REAL A 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 HEALTHCARE REAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HEALTHCARE REAL A has no effect on the direction of Astral Foods i.e., Astral Foods and HEALTHCARE REAL go up and down completely randomly.

Pair Corralation between Astral Foods and HEALTHCARE REAL

Assuming the 90 days trading horizon Astral Foods is expected to generate 1.07 times less return on investment than HEALTHCARE REAL. In addition to that, Astral Foods is 1.04 times more volatile than HEALTHCARE REAL A. It trades about 0.11 of its total potential returns per unit of risk. HEALTHCARE REAL A is currently generating about 0.12 per unit of volatility. If you would invest  1,580  in HEALTHCARE REAL A on September 5, 2024 and sell it today you would earn a total of  180.00  from holding HEALTHCARE REAL A or generate 11.39% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.46%
Values	Daily Returns

Astral Foods Limited  vs.  HEALTHCARE REAL A

Astral Foods Limited

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Astral Foods Limited are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, Astral Foods may actually be approaching a critical reversion point that can send shares even higher in January 2025.

HEALTHCARE REAL A

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in HEALTHCARE REAL A are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, HEALTHCARE REAL may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Astral Foods and HEALTHCARE REAL

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

The idea behind Astral Foods Limited and HEALTHCARE REAL A 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.