Correlation Between FarmStory and Haesung Optics
Can any of the company-specific risk be diversified away by investing in both FarmStory and Haesung Optics 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 Haesung Optics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FarmStory Co and Haesung Optics Co, you can compare the effects of market volatilities on FarmStory and Haesung Optics 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 Haesung Optics. Check out your portfolio center. Please also check ongoing floating volatility patterns of FarmStory and Haesung Optics.
Diversification Opportunities for FarmStory and Haesung Optics
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between FarmStory and Haesung is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding FarmStory Co and Haesung Optics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Haesung Optics 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 Haesung Optics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Haesung Optics has no effect on the direction of FarmStory i.e., FarmStory and Haesung Optics go up and down completely randomly.
Pair Corralation between FarmStory and Haesung Optics
Assuming the 90 days trading horizon FarmStory Co is expected to generate 0.54 times more return on investment than Haesung Optics. However, FarmStory Co is 1.84 times less risky than Haesung Optics. It trades about 0.09 of its potential returns per unit of risk. Haesung Optics Co is currently generating about 0.04 per unit of risk. If you would invest 119,500 in FarmStory Co on November 28, 2024 and sell it today you would earn a total of 2,500 from holding FarmStory Co or generate 2.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
FarmStory Co vs. Haesung Optics Co
Performance |
| Timeline |
| FarmStory |
| Haesung Optics |
FarmStory and Haesung Optics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FarmStory and Haesung Optics
The main advantage of trading using opposite FarmStory and Haesung Optics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FarmStory position performs unexpectedly, Haesung Optics 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 Haesung Optics will offset losses from the drop in Haesung Optics' long position.| FarmStory vs. Alton Sports CoLtd | FarmStory vs. Coloray International Investment | FarmStory vs. Next Entertainment World | FarmStory vs. Barunson Entertainment Arts |
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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 Positions Ratings module to 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.
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