Correlation Between Pick N and Astral Foods

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

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

Diversification Opportunities for Pick N and Astral Foods

0.44

Correlation Coefficient

Pick N  Astral Foods

Very weak diversification

The 3 months correlation between Pick and Astral is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Pick N Pay and Astral Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Astral Foods and Pick N 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 Pick N Pay 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 has no effect on the direction of Pick N i.e., Pick N and Astral Foods go up and down completely randomly.

Pair Corralation between Pick N and Astral Foods

Assuming the 90 days trading horizon Pick N Pay is expected to under-perform the Astral Foods. But the stock apears to be less risky and, when comparing its historical volatility, Pick N Pay is 26.91 times less risky than Astral Foods. The stock trades about -0.03 of its potential returns per unit of risk. The Astral Foods is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  1,583,115  in Astral Foods on September 4, 2024 and sell it today you would earn a total of  287,985  from holding Astral Foods or generate 18.19% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	99.39%
Values	Daily Returns

Pick N Pay  vs.  Astral Foods

Pick N Pay

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Pick N Pay are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Pick N exhibited solid returns over the last few months and may actually be approaching a breakup point.

Astral Foods

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Astral Foods are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Astral Foods may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Pick N and Astral Foods

The main advantage of trading using opposite Pick N and Astral Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pick N 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.

The idea behind Pick N Pay and Astral 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.