Correlation Between FarmStory and Global Standard
Can any of the company-specific risk be diversified away by investing in both FarmStory and Global Standard 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 Global Standard into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FarmStory Co and Global Standard Technology, you can compare the effects of market volatilities on FarmStory and Global Standard 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 Global Standard. Check out your portfolio center. Please also check ongoing floating volatility patterns of FarmStory and Global Standard.
Diversification Opportunities for FarmStory and Global Standard
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between FarmStory and Global is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding FarmStory Co and Global Standard Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Standard Tech 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 Global Standard. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Standard Tech has no effect on the direction of FarmStory i.e., FarmStory and Global Standard go up and down completely randomly.
Pair Corralation between FarmStory and Global Standard
Assuming the 90 days trading horizon FarmStory Co is expected to under-perform the Global Standard. But the stock apears to be less risky and, when comparing its historical volatility, FarmStory Co is 1.61 times less risky than Global Standard. The stock trades about -0.03 of its potential returns per unit of risk. The Global Standard Technology is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,010,784 in Global Standard Technology on September 3, 2024 and sell it today you would earn a total of 389,216 from holding Global Standard Technology or generate 38.51% 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. Global Standard Technology
Performance |
| Timeline |
| FarmStory |
| Global Standard Tech |
FarmStory and Global Standard Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FarmStory and Global Standard
The main advantage of trading using opposite FarmStory and Global Standard positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FarmStory position performs unexpectedly, Global Standard 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 Global Standard will offset losses from the drop in Global Standard's long position.| FarmStory vs. Hwangkum Steel Technology | FarmStory vs. KMH Hitech Co | FarmStory vs. Daiyang Metal Co | FarmStory vs. Raontech |
| Global Standard vs. Dongsin Engineering Construction | Global Standard vs. Doosan Fuel Cell | Global Standard vs. Daishin Balance 1 | Global Standard vs. Total Soft Bank |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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