Correlation Between Astral Foods and WK Kellogg

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

Diversification Opportunities for Astral Foods and WK Kellogg

-0.16

Correlation Coefficient

Astral Foods  WK Kellogg

Good diversification

The 3 months correlation between Astral and KLG is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Astral Foods Limited and WK Kellogg Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WK Kellogg 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 WK Kellogg. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WK Kellogg has no effect on the direction of Astral Foods i.e., Astral Foods and WK Kellogg go up and down completely randomly.

Pair Corralation between Astral Foods and WK Kellogg

Assuming the 90 days horizon Astral Foods Limited is expected to generate 0.36 times more return on investment than WK Kellogg. However, Astral Foods Limited is 2.81 times less risky than WK Kellogg. It trades about 0.24 of its potential returns per unit of risk. WK Kellogg Co is currently generating about -0.08 per unit of risk. If you would invest  710.00  in Astral Foods Limited on October 23, 2024 and sell it today you would earn a total of  29.00  from holding Astral Foods Limited or generate 4.08% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	94.74%
Values	Daily Returns

Astral Foods Limited  vs.  WK Kellogg Co

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. Despite nearly stable fundamental indicators, Astral Foods is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

WK Kellogg

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days WK Kellogg Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable essential indicators, WK Kellogg 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 WK Kellogg

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

The idea behind Astral Foods Limited and WK Kellogg Co 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 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.