Correlation Between Plantify Foods and Ascot Resources

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

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

Diversification Opportunities for Plantify Foods and Ascot Resources

-0.31

Correlation Coefficient

Plantify Foods  Ascot Resources

Very good diversification

The 3 months correlation between Plantify and Ascot is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Plantify Foods and Ascot Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ascot Resources and Plantify 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 Plantify Foods are associated (or correlated) with Ascot Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ascot Resources has no effect on the direction of Plantify Foods i.e., Plantify Foods and Ascot Resources go up and down completely randomly.

Pair Corralation between Plantify Foods and Ascot Resources

Assuming the 90 days trading horizon Plantify Foods is expected to generate 0.4 times more return on investment than Ascot Resources. However, Plantify Foods is 2.52 times less risky than Ascot Resources. It trades about 0.18 of its potential returns per unit of risk. Ascot Resources is currently generating about -0.07 per unit of risk. If you would invest  30.00  in Plantify Foods on December 25, 2024 and sell it today you would earn a total of  10.00  from holding Plantify Foods or generate 33.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.36%
Values	Daily Returns

Plantify Foods  vs.  Ascot Resources

Plantify Foods

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Plantify Foods are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating technical and fundamental indicators, Plantify Foods showed solid returns over the last few months and may actually be approaching a breakup point.

Ascot Resources

Risk-Adjusted Performance

Very Weak

Over the last 90 days Ascot Resources has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Plantify Foods and Ascot Resources

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

The idea behind Plantify Foods and Ascot Resources 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.