Correlation Between Astral Foods and Kore Potash

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

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

Diversification Opportunities for Astral Foods and Kore Potash

-0.76

Correlation Coefficient

Astral Foods  Kore Potash

Pay attention - limited upside

The 3 months correlation between Astral and Kore is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Astral Foods and Kore Potash Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kore Potash Plc 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 Kore Potash. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kore Potash Plc has no effect on the direction of Astral Foods i.e., Astral Foods and Kore Potash go up and down completely randomly.

Pair Corralation between Astral Foods and Kore Potash

Assuming the 90 days trading horizon Astral Foods is expected to generate 0.28 times more return on investment than Kore Potash. However, Astral Foods is 3.59 times less risky than Kore Potash. It trades about 0.15 of its potential returns per unit of risk. Kore Potash Plc is currently generating about -0.09 per unit of risk. If you would invest  1,697,700  in Astral Foods on October 10, 2024 and sell it today you would earn a total of  146,600  from holding Astral Foods or generate 8.64% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Astral Foods  vs.  Kore Potash Plc

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.

Kore Potash Plc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kore Potash Plc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with Astral Foods and Kore Potash

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

The idea behind Astral Foods and Kore Potash Plc 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 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.