Correlation Between FarmStory and IC Technology
Can any of the company-specific risk be diversified away by investing in both FarmStory and IC Technology 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 IC Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FarmStory Co and IC Technology Co, you can compare the effects of market volatilities on FarmStory and IC Technology 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 IC Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of FarmStory and IC Technology.
Diversification Opportunities for FarmStory and IC Technology
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between FarmStory and 052860 is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding FarmStory Co and IC Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IC Technology 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 IC Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IC Technology has no effect on the direction of FarmStory i.e., FarmStory and IC Technology go up and down completely randomly.
Pair Corralation between FarmStory and IC Technology
Assuming the 90 days trading horizon FarmStory Co is expected to under-perform the IC Technology. But the stock apears to be less risky and, when comparing its historical volatility, FarmStory Co is 1.45 times less risky than IC Technology. The stock trades about -0.01 of its potential returns per unit of risk. The IC Technology Co is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 272,000 in IC Technology Co on November 27, 2024 and sell it today you would lose (39,000) from holding IC Technology Co or give up 14.34% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
FarmStory Co vs. IC Technology Co
Performance |
| Timeline |
| FarmStory |
| IC Technology |
FarmStory and IC Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FarmStory and IC Technology
The main advantage of trading using opposite FarmStory and IC Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FarmStory position performs unexpectedly, IC Technology 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 IC Technology will offset losses from the drop in IC Technology's long position.| FarmStory vs. Hyunwoo Industrial Co | FarmStory vs. National Plastic Co | FarmStory vs. LEENO Industrial | FarmStory vs. Hyosung Advanced Materials |
| IC Technology vs. Haitai Confectionery Foods | IC Technology vs. Samlip General Foods | IC Technology vs. Ssangyong Information Communication | IC Technology vs. Sempio Foods Co |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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