Correlation Between Malayan Banking and FARM FRESH
Can any of the company-specific risk be diversified away by investing in both Malayan Banking and FARM FRESH 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 Malayan Banking and FARM FRESH into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Malayan Banking Bhd and FARM FRESH BERHAD, you can compare the effects of market volatilities on Malayan Banking and FARM FRESH 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 Malayan Banking with a short position of FARM FRESH. Check out your portfolio center. Please also check ongoing floating volatility patterns of Malayan Banking and FARM FRESH.
Diversification Opportunities for Malayan Banking and FARM FRESH
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Malayan and FARM is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Malayan Banking Bhd and FARM FRESH BERHAD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FARM FRESH BERHAD and Malayan Banking 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 Malayan Banking Bhd are associated (or correlated) with FARM FRESH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FARM FRESH BERHAD has no effect on the direction of Malayan Banking i.e., Malayan Banking and FARM FRESH go up and down completely randomly.
Pair Corralation between Malayan Banking and FARM FRESH
Assuming the 90 days trading horizon Malayan Banking is expected to generate 2.84 times less return on investment than FARM FRESH. But when comparing it to its historical volatility, Malayan Banking Bhd is 2.02 times less risky than FARM FRESH. It trades about 0.06 of its potential returns per unit of risk. FARM FRESH BERHAD is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 180.00 in FARM FRESH BERHAD on October 20, 2024 and sell it today you would earn a total of 4.00 from holding FARM FRESH BERHAD or generate 2.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Malayan Banking Bhd vs. FARM FRESH BERHAD
Performance |
| Timeline |
| Malayan Banking Bhd |
| FARM FRESH BERHAD |
Malayan Banking and FARM FRESH Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Malayan Banking and FARM FRESH
The main advantage of trading using opposite Malayan Banking and FARM FRESH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Malayan Banking position performs unexpectedly, FARM FRESH 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 FARM FRESH will offset losses from the drop in FARM FRESH's long position.| Malayan Banking vs. Public Bank Bhd | Malayan Banking vs. Eonmetall Group Bhd | Malayan Banking vs. Bank Islam Malaysia | Malayan Banking vs. Awanbiru Technology Bhd |
| FARM FRESH vs. MClean Technologies Bhd | FARM FRESH vs. Press Metal Bhd | FARM FRESH vs. Shangri La Hotels | FARM FRESH vs. Choo Bee Metal |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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