Correlation Between ES Ceramics and Farm Price
Can any of the company-specific risk be diversified away by investing in both ES Ceramics and Farm Price 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 ES Ceramics and Farm Price into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ES Ceramics Technology and Farm Price Holdings, you can compare the effects of market volatilities on ES Ceramics and Farm Price 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 ES Ceramics with a short position of Farm Price. Check out your portfolio center. Please also check ongoing floating volatility patterns of ES Ceramics and Farm Price.
Diversification Opportunities for ES Ceramics and Farm Price
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between 0100 and Farm is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding ES Ceramics Technology and Farm Price Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Farm Price Holdings and ES Ceramics 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 ES Ceramics Technology are associated (or correlated) with Farm Price. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Farm Price Holdings has no effect on the direction of ES Ceramics i.e., ES Ceramics and Farm Price go up and down completely randomly.
Pair Corralation between ES Ceramics and Farm Price
Assuming the 90 days trading horizon ES Ceramics Technology is expected to under-perform the Farm Price. In addition to that, ES Ceramics is 1.71 times more volatile than Farm Price Holdings. It trades about -0.08 of its total potential returns per unit of risk. Farm Price Holdings is currently generating about -0.04 per unit of volatility. If you would invest 55.00 in Farm Price Holdings on August 31, 2024 and sell it today you would lose (1.00) from holding Farm Price Holdings or give up 1.82% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ES Ceramics Technology vs. Farm Price Holdings
Performance |
| Timeline |
| ES Ceramics Technology |
| Farm Price Holdings |
ES Ceramics and Farm Price Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ES Ceramics and Farm Price
The main advantage of trading using opposite ES Ceramics and Farm Price positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ES Ceramics position performs unexpectedly, Farm Price 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 Farm Price will offset losses from the drop in Farm Price's long position.| ES Ceramics vs. Binasat Communications Bhd | ES Ceramics vs. Nova Wellness Group | ES Ceramics vs. KPJ Healthcare Bhd | ES Ceramics vs. Resintech Bhd |
| Farm Price vs. Malayan Banking Bhd | Farm Price vs. Public Bank Bhd | Farm Price vs. Petronas Chemicals Group | Farm Price vs. Tenaga Nasional Bhd |
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 CEOs Directory module to screen CEOs from public companies around the world.
Other Complementary Tools
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk |