Correlation Between Farm Price and Cengild Medical
Can any of the company-specific risk be diversified away by investing in both Farm Price and Cengild Medical 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 Farm Price and Cengild Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Farm Price Holdings and Cengild Medical Berhad, you can compare the effects of market volatilities on Farm Price and Cengild Medical 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 Farm Price with a short position of Cengild Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Farm Price and Cengild Medical.
Diversification Opportunities for Farm Price and Cengild Medical
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Farm and Cengild is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Farm Price Holdings and Cengild Medical Berhad in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cengild Medical Berhad and Farm Price 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 Farm Price Holdings are associated (or correlated) with Cengild Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cengild Medical Berhad has no effect on the direction of Farm Price i.e., Farm Price and Cengild Medical go up and down completely randomly.
Pair Corralation between Farm Price and Cengild Medical
Assuming the 90 days trading horizon Farm Price is expected to generate 22.69 times less return on investment than Cengild Medical. But when comparing it to its historical volatility, Farm Price Holdings is 1.41 times less risky than Cengild Medical. It trades about 0.01 of its potential returns per unit of risk. Cengild Medical Berhad is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 26.00 in Cengild Medical Berhad on September 1, 2024 and sell it today you would earn a total of 2.00 from holding Cengild Medical Berhad or generate 7.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Farm Price Holdings vs. Cengild Medical Berhad
Performance |
| Timeline |
| Farm Price Holdings |
| Cengild Medical Berhad |
Farm Price and Cengild Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Farm Price and Cengild Medical
The main advantage of trading using opposite Farm Price and Cengild Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Farm Price position performs unexpectedly, Cengild Medical 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 Cengild Medical will offset losses from the drop in Cengild Medical's long position.| Farm Price vs. Malayan Banking Bhd | Farm Price vs. Public Bank Bhd | Farm Price vs. Petronas Chemicals Group | Farm Price vs. Tenaga Nasional Bhd |
| Cengild Medical vs. Malayan Banking Bhd | Cengild Medical vs. Public Bank Bhd | Cengild Medical vs. Petronas Chemicals Group | Cengild Medical vs. Tenaga Nasional Bhd |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
Other Complementary Tools
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes |