Correlation Between Astral Foods and Bilibili

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

Diversification Opportunities for Astral Foods and Bilibili

0.26

Correlation Coefficient

Astral Foods  Bilibili

Modest diversification

The 3 months correlation between Astral and Bilibili is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Astral Foods Limited and Bilibili in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bilibili 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 Bilibili. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bilibili has no effect on the direction of Astral Foods i.e., Astral Foods and Bilibili go up and down completely randomly.

Pair Corralation between Astral Foods and Bilibili

Assuming the 90 days trading horizon Astral Foods Limited is expected to generate 4.41 times more return on investment than Bilibili. However, Astral Foods is 4.41 times more volatile than Bilibili. It trades about 0.12 of its potential returns per unit of risk. Bilibili is currently generating about 0.01 per unit of risk. If you would invest  378.00  in Astral Foods Limited on December 30, 2024 and sell it today you would earn a total of  422.00  from holding Astral Foods Limited or generate 111.64% 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.  Bilibili

Astral Foods Limited

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Astral Foods Limited are ranked lower than 9 (%) 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.

Bilibili

Risk-Adjusted Performance

Very Weak

Over the last 90 days Bilibili has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable fundamental drivers, Bilibili 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 Bilibili

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

The idea behind Astral Foods Limited and Bilibili 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.