Correlation Between FarmStory and KHVATEC CoLtd
Can any of the company-specific risk be diversified away by investing in both FarmStory and KHVATEC CoLtd 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 KHVATEC CoLtd into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FarmStory Co and KHVATEC CoLtd, you can compare the effects of market volatilities on FarmStory and KHVATEC CoLtd 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 KHVATEC CoLtd. Check out your portfolio center. Please also check ongoing floating volatility patterns of FarmStory and KHVATEC CoLtd.
Diversification Opportunities for FarmStory and KHVATEC CoLtd
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between FarmStory and KHVATEC is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding FarmStory Co and KHVATEC CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KHVATEC CoLtd 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 KHVATEC CoLtd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KHVATEC CoLtd has no effect on the direction of FarmStory i.e., FarmStory and KHVATEC CoLtd go up and down completely randomly.
Pair Corralation between FarmStory and KHVATEC CoLtd
Assuming the 90 days trading horizon FarmStory Co is expected to generate 0.8 times more return on investment than KHVATEC CoLtd. However, FarmStory Co is 1.25 times less risky than KHVATEC CoLtd. It trades about -0.09 of its potential returns per unit of risk. KHVATEC CoLtd is currently generating about -0.09 per unit of risk. If you would invest 222,961 in FarmStory Co on September 4, 2024 and sell it today you would lose (109,761) from holding FarmStory Co or give up 49.23% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
FarmStory Co vs. KHVATEC CoLtd
Performance |
| Timeline |
| FarmStory |
| KHVATEC CoLtd |
FarmStory and KHVATEC CoLtd Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FarmStory and KHVATEC CoLtd
The main advantage of trading using opposite FarmStory and KHVATEC CoLtd positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FarmStory position performs unexpectedly, KHVATEC CoLtd 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 KHVATEC CoLtd will offset losses from the drop in KHVATEC CoLtd's long position.| FarmStory vs. LG Display | FarmStory vs. Hyundai Motor | FarmStory vs. Hyundai Motor Co | FarmStory vs. Hyundai Motor Co |
| KHVATEC CoLtd vs. Seoul Semiconductor Co | KHVATEC CoLtd vs. Interflex Co | KHVATEC CoLtd vs. Intops Co | KHVATEC CoLtd vs. Kmw Inc |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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