Correlation Between FarmStory and N Citron
Can any of the company-specific risk be diversified away by investing in both FarmStory and N Citron 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 N Citron into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FarmStory Co and N Citron, you can compare the effects of market volatilities on FarmStory and N Citron 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 N Citron. Check out your portfolio center. Please also check ongoing floating volatility patterns of FarmStory and N Citron.
Diversification Opportunities for FarmStory and N Citron
Very poor diversification
The 3 months correlation between FarmStory and 101400 is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding FarmStory Co and N Citron in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on N Citron 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 N Citron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of N Citron has no effect on the direction of FarmStory i.e., FarmStory and N Citron go up and down completely randomly.
Pair Corralation between FarmStory and N Citron
Assuming the 90 days trading horizon FarmStory Co is expected to under-perform the N Citron. In addition to that, FarmStory is 1.09 times more volatile than N Citron. It trades about -0.32 of its total potential returns per unit of risk. N Citron is currently generating about -0.09 per unit of volatility. If you would invest 41,400 in N Citron on September 3, 2024 and sell it today you would lose (1,400) from holding N Citron or give up 3.38% 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. N Citron
Performance |
| Timeline |
| FarmStory |
| N Citron |
FarmStory and N Citron Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FarmStory and N Citron
The main advantage of trading using opposite FarmStory and N Citron positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FarmStory position performs unexpectedly, N Citron 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 N Citron will offset losses from the drop in N Citron's long position.| FarmStory vs. Hwangkum Steel Technology | FarmStory vs. KMH Hitech Co | FarmStory vs. Daiyang Metal Co | FarmStory vs. Raontech |
| N Citron vs. Dongsin Engineering Construction | N Citron vs. Doosan Fuel Cell | N Citron vs. Daishin Balance 1 | N Citron 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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