Correlation Between Farm Price and Malayan Banking
Can any of the company-specific risk be diversified away by investing in both Farm Price and Malayan Banking 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 Malayan Banking 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 Malayan Banking Bhd, you can compare the effects of market volatilities on Farm Price and Malayan Banking 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 Malayan Banking. Check out your portfolio center. Please also check ongoing floating volatility patterns of Farm Price and Malayan Banking.
Diversification Opportunities for Farm Price and Malayan Banking
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Farm and Malayan is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Farm Price Holdings and Malayan Banking Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Malayan Banking Bhd 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 Malayan Banking. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Malayan Banking Bhd has no effect on the direction of Farm Price i.e., Farm Price and Malayan Banking go up and down completely randomly.
Pair Corralation between Farm Price and Malayan Banking
Assuming the 90 days trading horizon Farm Price Holdings is expected to under-perform the Malayan Banking. In addition to that, Farm Price is 2.63 times more volatile than Malayan Banking Bhd. It trades about -0.57 of its total potential returns per unit of risk. Malayan Banking Bhd is currently generating about 0.15 per unit of volatility. If you would invest 996.00 in Malayan Banking Bhd on October 21, 2024 and sell it today you would earn a total of 18.00 from holding Malayan Banking Bhd or generate 1.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Farm Price Holdings vs. Malayan Banking Bhd
Performance |
| Timeline |
| Farm Price Holdings |
| Malayan Banking Bhd |
Farm Price and Malayan Banking Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Farm Price and Malayan Banking
The main advantage of trading using opposite Farm Price and Malayan Banking positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Farm Price position performs unexpectedly, Malayan Banking 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 Malayan Banking will offset losses from the drop in Malayan Banking'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 |
| Malayan Banking vs. Public Bank Bhd | Malayan Banking vs. Eonmetall Group Bhd | Malayan Banking vs. Bank Islam Malaysia | Malayan Banking vs. Awanbiru Technology 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
Other Complementary Tools
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio |