Correlation Between Astral Foods and J+J SNACK

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

Diversification Opportunities for Astral Foods and J+J SNACK

0.3
  Correlation Coefficient

Weak diversification

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

Pair Corralation between Astral Foods and J+J SNACK

Assuming the 90 days trading horizon Astral Foods Limited is expected to generate 7.81 times more return on investment than J+J SNACK. However, Astral Foods is 7.81 times more volatile than JJ SNACK FOODS. It trades about 0.03 of its potential returns per unit of risk. JJ SNACK FOODS is currently generating about 0.03 per unit of risk. If you would invest  865.00  in Astral Foods Limited on September 10, 2024 and sell it today you would earn a total of  75.00  from holding Astral Foods Limited or generate 8.67% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Astral Foods Limited  vs.  JJ SNACK FOODS

 Performance 
       Timeline  
Astral Foods Limited 

Risk-Adjusted Performance

8 of 100

 
Weak
 
Strong
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.
JJ SNACK FOODS 

Risk-Adjusted Performance

11 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in JJ SNACK FOODS are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, J+J SNACK may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Astral Foods and J+J SNACK Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Astral Foods and J+J SNACK

The main advantage of trading using opposite Astral Foods and J+J SNACK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Astral Foods position performs unexpectedly, J+J SNACK 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 J+J SNACK will offset losses from the drop in J+J SNACK's long position.
The idea behind Astral Foods Limited and JJ SNACK FOODS 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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.

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