Correlation Between Astral Foods and Boxer Retail

Can any of the company-specific risk be diversified away by investing in both Astral Foods and Boxer Retail 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 Boxer Retail into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Astral Foods and Boxer Retail, you can compare the effects of market volatilities on Astral Foods and Boxer Retail 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 Boxer Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of Astral Foods and Boxer Retail.

Diversification Opportunities for Astral Foods and Boxer Retail

-0.54

Correlation Coefficient

Astral Foods  Boxer Retail

Excellent diversification

The 3 months correlation between Astral and Boxer is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Astral Foods and Boxer Retail in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boxer Retail 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 are associated (or correlated) with Boxer Retail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Boxer Retail has no effect on the direction of Astral Foods i.e., Astral Foods and Boxer Retail go up and down completely randomly.

Pair Corralation between Astral Foods and Boxer Retail

Assuming the 90 days trading horizon Astral Foods is expected to generate 24.51 times more return on investment than Boxer Retail. However, Astral Foods is 24.51 times more volatile than Boxer Retail. It trades about 0.08 of its potential returns per unit of risk. Boxer Retail is currently generating about 0.22 per unit of risk. If you would invest  1,555,000  in Astral Foods on October 12, 2024 and sell it today you would earn a total of  295,800  from holding Astral Foods or generate 19.02% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	7.61%
Values	Daily Returns

Astral Foods  vs.  Boxer Retail

Astral Foods

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Astral Foods are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, Astral Foods is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Boxer Retail

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Boxer Retail are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Boxer Retail exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Astral Foods and Boxer Retail

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

The idea behind Astral Foods and Boxer Retail 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.