Correlation Between ALLTEL and Astral Foods

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

By analyzing existing cross correlation between ALLTEL P 68 and Astral Foods Limited, you can compare the effects of market volatilities on ALLTEL 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 ALLTEL with a short position of Astral Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of ALLTEL and Astral Foods.

Diversification Opportunities for ALLTEL and Astral Foods

0.43

Correlation Coefficient

ALLTEL  Astral Foods

Very weak diversification

The 3 months correlation between ALLTEL and Astral is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding ALLTEL P 68 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 ALLTEL 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 ALLTEL P 68 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 ALLTEL i.e., ALLTEL and Astral Foods go up and down completely randomly.

Pair Corralation between ALLTEL and Astral Foods

Assuming the 90 days trading horizon ALLTEL P 68 is expected to generate 2.0 times more return on investment than Astral Foods. However, ALLTEL is 2.0 times more volatile than Astral Foods Limited. It trades about 0.1 of its potential returns per unit of risk. Astral Foods Limited is currently generating about 0.13 per unit of risk. If you would invest  10,361  in ALLTEL P 68 on December 24, 2024 and sell it today you would earn a total of  194.00  from holding ALLTEL P 68 or generate 1.87% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	31.67%
Values	Daily Returns

ALLTEL P 68  vs.  Astral Foods Limited

ALLTEL P 68

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in ALLTEL P 68 are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat conflicting basic indicators, ALLTEL may actually be approaching a critical reversion point that can send shares even higher in April 2025.

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 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable fundamental indicators, Astral Foods is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with ALLTEL and Astral Foods

The main advantage of trading using opposite ALLTEL and Astral Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ALLTEL 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 ALLTEL P 68 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.

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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.