Correlation Between Astral Foods and COSMOSTEEL HLDGS

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

Diversification Opportunities for Astral Foods and COSMOSTEEL HLDGS

AstralCOSMOSTEELDiversified AwayAstralCOSMOSTEELDiversified Away100%
0.64
  Correlation Coefficient

Poor diversification

The 3 months correlation between Astral and COSMOSTEEL is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Astral Foods Limited and COSMOSTEEL HLDGS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COSMOSTEEL HLDGS 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 COSMOSTEEL HLDGS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COSMOSTEEL HLDGS has no effect on the direction of Astral Foods i.e., Astral Foods and COSMOSTEEL HLDGS go up and down completely randomly.

Pair Corralation between Astral Foods and COSMOSTEEL HLDGS

Assuming the 90 days trading horizon Astral Foods is expected to generate 1.9 times less return on investment than COSMOSTEEL HLDGS. But when comparing it to its historical volatility, Astral Foods Limited is 2.18 times less risky than COSMOSTEEL HLDGS. It trades about 0.03 of its potential returns per unit of risk. COSMOSTEEL HLDGS is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  6.45  in COSMOSTEEL HLDGS on October 10, 2024 and sell it today you would earn a total of  0.15  from holding COSMOSTEEL HLDGS or generate 2.33% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Astral Foods Limited  vs.  COSMOSTEEL HLDGS

 Performance 
JavaScript chart by amCharts 3.21.15OctNovDec -10-5051015
JavaScript chart by amCharts 3.21.15A9U CMR
       Timeline  
Astral Foods Limited 

Risk-Adjusted Performance

2 of 100

 
Weak
 
Strong
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 newest stock price uproar, may contribute to short-horizon losses for the private investors.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan8.48.68.899.29.49.69.8
COSMOSTEEL HLDGS 

Risk-Adjusted Performance

2 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in COSMOSTEEL HLDGS are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, COSMOSTEEL HLDGS is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan0.0580.060.0620.0640.0660.0680.070.0720.074

Astral Foods and COSMOSTEEL HLDGS Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-2.5-1.87-1.24-0.62-0.01010.591.21.82.4 0.050.100.15
JavaScript chart by amCharts 3.21.15A9U CMR
       Returns  

Pair Trading with Astral Foods and COSMOSTEEL HLDGS

The main advantage of trading using opposite Astral Foods and COSMOSTEEL HLDGS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Astral Foods position performs unexpectedly, COSMOSTEEL HLDGS 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 COSMOSTEEL HLDGS will offset losses from the drop in COSMOSTEEL HLDGS's long position.
The idea behind Astral Foods Limited and COSMOSTEEL HLDGS 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.

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