Correlation Between AECOM TECHNOLOGY and Astral Foods

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

By analyzing existing cross correlation between AECOM TECHNOLOGY and Astral Foods Limited, you can compare the effects of market volatilities on AECOM TECHNOLOGY and Astral Foods 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 AECOM TECHNOLOGY with a short position of Astral Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of AECOM TECHNOLOGY and Astral Foods.

Diversification Opportunities for AECOM TECHNOLOGY and Astral Foods

-0.27

Correlation Coefficient

AECOM TECHNOLOGY  Astral Foods

Very good diversification

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

Pair Corralation between AECOM TECHNOLOGY and Astral Foods

Assuming the 90 days trading horizon AECOM TECHNOLOGY is expected to under-perform the Astral Foods. But the stock apears to be less risky and, when comparing its historical volatility, AECOM TECHNOLOGY is 11.83 times less risky than Astral Foods. The stock trades about -0.16 of its potential returns per unit of risk. The Astral Foods Limited is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  399.00  in Astral Foods Limited on December 21, 2024 and sell it today you would earn a total of  376.00  from holding Astral Foods Limited or generate 94.24% return on investment over 90 days.

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

AECOM TECHNOLOGY  vs.  Astral Foods Limited

AECOM TECHNOLOGY

Risk-Adjusted Performance

Very Weak

Over the last 90 days AECOM TECHNOLOGY has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Astral Foods Limited

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Astral Foods Limited are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Astral Foods unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with AECOM TECHNOLOGY and Astral Foods

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

The idea behind AECOM TECHNOLOGY and Astral Foods Limited 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.