Correlation Between Astral Foods and CA Sales

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

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

Diversification Opportunities for Astral Foods and CA Sales

0.27

Correlation Coefficient

Astral Foods  CA Sales

Modest diversification

The 3 months correlation between Astral and CAA is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Astral Foods and CA Sales Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CA Sales Holdings 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 CA Sales. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CA Sales Holdings has no effect on the direction of Astral Foods i.e., Astral Foods and CA Sales go up and down completely randomly.

Pair Corralation between Astral Foods and CA Sales

Assuming the 90 days trading horizon Astral Foods is expected to generate 33.76 times more return on investment than CA Sales. However, Astral Foods is 33.76 times more volatile than CA Sales Holdings. It trades about 0.07 of its potential returns per unit of risk. CA Sales Holdings is currently generating about 0.08 per unit of risk. If you would invest  1,566,800  in Astral Foods on October 12, 2024 and sell it today you would earn a total of  284,000  from holding Astral Foods or generate 18.13% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	99.39%
Values	Daily Returns

Astral Foods  vs.  CA Sales Holdings

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.

CA Sales Holdings

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in CA Sales Holdings are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak technical and fundamental indicators, CA Sales may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Astral Foods and CA Sales

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

The idea behind Astral Foods and CA Sales Holdings 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..