Correlation Between Astral Foods and Trupanion

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

Diversification Opportunities for Astral Foods and Trupanion

0.0

Correlation Coefficient

Astral Foods  Trupanion

Pay attention - limited upside

The 3 months correlation between Astral and Trupanion is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Astral Foods Limited and Trupanion in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trupanion 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 Trupanion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trupanion has no effect on the direction of Astral Foods i.e., Astral Foods and Trupanion go up and down completely randomly.

Pair Corralation between Astral Foods and Trupanion

If you would invest  4,156  in Trupanion on October 7, 2024 and sell it today you would earn a total of  802.00  from holding Trupanion or generate 19.3% return on investment over 90 days.

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

Astral Foods Limited  vs.  Trupanion

Astral Foods Limited

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Astral Foods Limited has generated negative risk-adjusted returns adding no value to investors with long positions. 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.

Trupanion

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Trupanion are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Trupanion reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Astral Foods and Trupanion

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

The idea behind Astral Foods Limited and Trupanion 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.