Correlation Between Farm Price and Apex Healthcare
Can any of the company-specific risk be diversified away by investing in both Farm Price and Apex Healthcare 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 Apex Healthcare 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 Apex Healthcare Bhd, you can compare the effects of market volatilities on Farm Price and Apex Healthcare 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 Apex Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Farm Price and Apex Healthcare.
Diversification Opportunities for Farm Price and Apex Healthcare
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Farm and Apex is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Farm Price Holdings and Apex Healthcare Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apex Healthcare 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 Apex Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apex Healthcare Bhd has no effect on the direction of Farm Price i.e., Farm Price and Apex Healthcare go up and down completely randomly.
Pair Corralation between Farm Price and Apex Healthcare
Assuming the 90 days trading horizon Farm Price Holdings is expected to generate 1.82 times more return on investment than Apex Healthcare. However, Farm Price is 1.82 times more volatile than Apex Healthcare Bhd. It trades about 0.01 of its potential returns per unit of risk. Apex Healthcare Bhd is currently generating about -0.34 per unit of risk. 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. Apex Healthcare Bhd
Performance |
| Timeline |
| Farm Price Holdings |
| Apex Healthcare Bhd |
Farm Price and Apex Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Farm Price and Apex Healthcare
The main advantage of trading using opposite Farm Price and Apex Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Farm Price position performs unexpectedly, Apex Healthcare 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 Apex Healthcare will offset losses from the drop in Apex Healthcare'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 |
| Apex Healthcare vs. Digistar Bhd | Apex Healthcare vs. Minetech Resources Bhd | Apex Healthcare vs. Swift Haulage Bhd | Apex Healthcare vs. Bina Darulaman 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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