Correlation Between Astral Foods and DEXUS

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

Diversification Opportunities for Astral Foods and DEXUS

-0.19

Correlation Coefficient

Astral Foods  DEXUS

Good diversification

The 3 months correlation between Astral and DEXUS is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Astral Foods Limited and DEXUS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DEXUS 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 DEXUS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DEXUS has no effect on the direction of Astral Foods i.e., Astral Foods and DEXUS go up and down completely randomly.

Pair Corralation between Astral Foods and DEXUS

Assuming the 90 days trading horizon Astral Foods Limited is expected to generate 1.71 times more return on investment than DEXUS. However, Astral Foods is 1.71 times more volatile than DEXUS. It trades about 0.02 of its potential returns per unit of risk. DEXUS is currently generating about 0.01 per unit of risk. If you would invest  805.00  in Astral Foods Limited on October 11, 2024 and sell it today you would earn a total of  100.00  from holding Astral Foods Limited or generate 12.42% return on investment over 90 days.

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

Astral Foods Limited  vs.  DEXUS

Astral Foods Limited

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Astral Foods Limited are ranked lower than 2 (%) 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 current stock price uproar, may contribute to short-horizon losses for the private investors.

DEXUS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days DEXUS has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, DEXUS is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Astral Foods and DEXUS

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

The idea behind Astral Foods Limited and DEXUS 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.