Correlation Between Astral Foods and Zoom Video

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

Diversification Opportunities for Astral Foods and Zoom Video

0.14

Correlation Coefficient

Astral Foods  Zoom Video

Average diversification

The 3 months correlation between Astral and Zoom is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Astral Foods Limited and Zoom Video Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zoom Video Communications 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 Zoom Video. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zoom Video Communications has no effect on the direction of Astral Foods i.e., Astral Foods and Zoom Video go up and down completely randomly.

Pair Corralation between Astral Foods and Zoom Video

Assuming the 90 days trading horizon Astral Foods is expected to generate 1.96 times less return on investment than Zoom Video. But when comparing it to its historical volatility, Astral Foods Limited is 1.33 times less risky than Zoom Video. It trades about 0.13 of its potential returns per unit of risk. Zoom Video Communications is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  6,229  in Zoom Video Communications on September 3, 2024 and sell it today you would earn a total of  1,707  from holding Zoom Video Communications or generate 27.4% return on investment over 90 days.

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

Astral Foods Limited  vs.  Zoom Video Communications

Astral Foods Limited

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Astral Foods Limited are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, Astral Foods unveiled solid returns over the last few months and may actually be approaching a breakup point.

Zoom Video Communications

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Zoom Video Communications are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Zoom Video unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Astral Foods and Zoom Video

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

The idea behind Astral Foods Limited and Zoom Video Communications 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.