Correlation Between Mobase Electronics and FarmStory
Can any of the company-specific risk be diversified away by investing in both Mobase Electronics and FarmStory 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 Mobase Electronics and FarmStory into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mobase Electronics CoLtd and FarmStory Co, you can compare the effects of market volatilities on Mobase Electronics and FarmStory 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 Mobase Electronics with a short position of FarmStory. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mobase Electronics and FarmStory.
Diversification Opportunities for Mobase Electronics and FarmStory
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Mobase and FarmStory is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Mobase Electronics CoLtd and FarmStory Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FarmStory and Mobase Electronics 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 Mobase Electronics CoLtd are associated (or correlated) with FarmStory. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FarmStory has no effect on the direction of Mobase Electronics i.e., Mobase Electronics and FarmStory go up and down completely randomly.
Pair Corralation between Mobase Electronics and FarmStory
Assuming the 90 days trading horizon Mobase Electronics CoLtd is expected to generate 1.42 times more return on investment than FarmStory. However, Mobase Electronics is 1.42 times more volatile than FarmStory Co. It trades about 0.03 of its potential returns per unit of risk. FarmStory Co is currently generating about -0.03 per unit of risk. If you would invest 133,286 in Mobase Electronics CoLtd on August 29, 2024 and sell it today you would earn a total of 26,114 from holding Mobase Electronics CoLtd or generate 19.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mobase Electronics CoLtd vs. FarmStory Co
Performance |
| Timeline |
| Mobase Electronics CoLtd |
| FarmStory |
Mobase Electronics and FarmStory Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mobase Electronics and FarmStory
The main advantage of trading using opposite Mobase Electronics and FarmStory positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mobase Electronics position performs unexpectedly, FarmStory 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 FarmStory will offset losses from the drop in FarmStory's long position.| Mobase Electronics vs. KMH Hitech Co | Mobase Electronics vs. GemVaxKAEL CoLtd | Mobase Electronics vs. Busan Industrial Co | Mobase Electronics vs. Busan Ind |
| FarmStory vs. Samsung Electronics Co | FarmStory vs. Samsung Electronics Co | FarmStory vs. Hyundai Motor Co | FarmStory vs. Hyundai Motor |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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