Correlation Between Farm Price and SSF Home
Can any of the company-specific risk be diversified away by investing in both Farm Price and SSF Home 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 SSF Home 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 SSF Home Group, you can compare the effects of market volatilities on Farm Price and SSF Home 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 SSF Home. Check out your portfolio center. Please also check ongoing floating volatility patterns of Farm Price and SSF Home.
Diversification Opportunities for Farm Price and SSF Home
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Farm and SSF is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Farm Price Holdings and SSF Home Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SSF Home Group 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 SSF Home. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SSF Home Group has no effect on the direction of Farm Price i.e., Farm Price and SSF Home go up and down completely randomly.
Pair Corralation between Farm Price and SSF Home
If you would invest 54.00 in Farm Price Holdings on September 2, 2024 and sell it today you would earn a total of 0.00 from holding Farm Price Holdings or generate 0.0% 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. SSF Home Group
Performance |
| Timeline |
| Farm Price Holdings |
| SSF Home Group |
Farm Price and SSF Home Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Farm Price and SSF Home
The main advantage of trading using opposite Farm Price and SSF Home positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Farm Price position performs unexpectedly, SSF Home 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 SSF Home will offset losses from the drop in SSF Home'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 |
| SSF Home vs. Farm Price Holdings | SSF Home vs. Petronas Chemicals Group | SSF Home vs. Press Metal Bhd | SSF Home vs. Mycron Steel 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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