Correlation Between FarmStory and Interflex
Can any of the company-specific risk be diversified away by investing in both FarmStory and Interflex 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 FarmStory and Interflex into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FarmStory Co and Interflex Co, you can compare the effects of market volatilities on FarmStory and Interflex 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 FarmStory with a short position of Interflex. Check out your portfolio center. Please also check ongoing floating volatility patterns of FarmStory and Interflex.
Diversification Opportunities for FarmStory and Interflex
Almost no diversification
The 3 months correlation between FarmStory and Interflex is 0.91. Overlapping area represents the amount of risk that can be diversified away by holding FarmStory Co and Interflex Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Interflex and FarmStory 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 FarmStory Co are associated (or correlated) with Interflex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Interflex has no effect on the direction of FarmStory i.e., FarmStory and Interflex go up and down completely randomly.
Pair Corralation between FarmStory and Interflex
Assuming the 90 days trading horizon FarmStory Co is expected to generate 0.83 times more return on investment than Interflex. However, FarmStory Co is 1.21 times less risky than Interflex. It trades about -0.19 of its potential returns per unit of risk. Interflex Co is currently generating about -0.18 per unit of risk. If you would invest 130,000 in FarmStory Co on August 29, 2024 and sell it today you would lose (9,400) from holding FarmStory Co or give up 7.23% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
FarmStory Co vs. Interflex Co
Performance |
| Timeline |
| FarmStory |
| Interflex |
FarmStory and Interflex Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FarmStory and Interflex
The main advantage of trading using opposite FarmStory and Interflex positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FarmStory position performs unexpectedly, Interflex 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 Interflex will offset losses from the drop in Interflex's long position.| 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
Other Complementary Tools
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Bonds Directory Find actively traded corporate debentures issued by US companies |