Correlation Between Astral Foods and J+J SNACK
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
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Astral and J+J is 0.24. 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 1.56 times more return on investment than J+J SNACK. However, Astral Foods is 1.56 times more volatile than JJ SNACK FOODS. It trades about 0.2 of its potential returns per unit of risk. JJ SNACK FOODS is currently generating about 0.26 per unit of risk. If you would invest 860.00 in Astral Foods Limited on September 6, 2024 and sell it today you would earn a total of 75.00 from holding Astral Foods Limited or generate 8.72% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Astral Foods Limited vs. JJ SNACK FOODS
Performance |
Timeline |
Astral Foods Limited |
JJ SNACK FOODS |
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.Astral Foods vs. URBAN OUTFITTERS | Astral Foods vs. Playa Hotels Resorts | Astral Foods vs. VARIOUS EATERIES LS | Astral Foods vs. DALATA HOTEL |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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