Correlation Between ECM Libra and Farm Price
Can any of the company-specific risk be diversified away by investing in both ECM Libra and Farm Price 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 ECM Libra and Farm Price into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ECM Libra Financial and Farm Price Holdings, you can compare the effects of market volatilities on ECM Libra and Farm Price 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 ECM Libra with a short position of Farm Price. Check out your portfolio center. Please also check ongoing floating volatility patterns of ECM Libra and Farm Price.
Diversification Opportunities for ECM Libra and Farm Price
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between ECM and Farm is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding ECM Libra Financial and Farm Price Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Farm Price Holdings and ECM Libra 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 ECM Libra Financial are associated (or correlated) with Farm Price. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Farm Price Holdings has no effect on the direction of ECM Libra i.e., ECM Libra and Farm Price go up and down completely randomly.
Pair Corralation between ECM Libra and Farm Price
Assuming the 90 days trading horizon ECM Libra Financial is expected to generate 2.5 times more return on investment than Farm Price. However, ECM Libra is 2.5 times more volatile than Farm Price Holdings. It trades about 0.09 of its potential returns per unit of risk. Farm Price Holdings is currently generating about -0.57 per unit of risk. If you would invest 17.00 in ECM Libra Financial on October 24, 2024 and sell it today you would earn a total of 1.00 from holding ECM Libra Financial or generate 5.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ECM Libra Financial vs. Farm Price Holdings
Performance |
| Timeline |
| ECM Libra Financial |
| Farm Price Holdings |
ECM Libra and Farm Price Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ECM Libra and Farm Price
The main advantage of trading using opposite ECM Libra and Farm Price positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ECM Libra position performs unexpectedly, Farm Price 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 Price will offset losses from the drop in Farm Price's long position.| ECM Libra vs. Riverview Rubber Estates | ECM Libra vs. Kossan Rubber Industries | ECM Libra vs. Binasat Communications Bhd | ECM Libra vs. Malayan Banking Bhd |
| Farm Price vs. Al Aqar Healthcare | Farm Price vs. Senheng New Retail | Farm Price vs. Kossan Rubber Industries | Farm Price vs. ECM Libra Financial |
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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