Correlation Between Mycron Steel and FARM FRESH
Can any of the company-specific risk be diversified away by investing in both Mycron Steel 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 Mycron Steel and FARM FRESH into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Mycron Steel Bhd and FARM FRESH BERHAD, you can compare the effects of market volatilities on Mycron Steel 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 Mycron Steel with a short position of FARM FRESH. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mycron Steel and FARM FRESH.
Diversification Opportunities for Mycron Steel and FARM FRESH
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Mycron and FARM is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Mycron Steel 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 Mycron Steel 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 Mycron Steel 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 Mycron Steel i.e., Mycron Steel and FARM FRESH go up and down completely randomly.
Pair Corralation between Mycron Steel and FARM FRESH
Assuming the 90 days trading horizon Mycron Steel Bhd is expected to under-perform the FARM FRESH. In addition to that, Mycron Steel is 2.44 times more volatile than FARM FRESH BERHAD. It trades about -0.06 of its total potential returns per unit of risk. FARM FRESH BERHAD is currently generating about 0.11 per unit of volatility. If you would invest 152.00 in FARM FRESH BERHAD on September 12, 2024 and sell it today you would earn a total of 30.00 from holding FARM FRESH BERHAD or generate 19.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Mycron Steel Bhd vs. FARM FRESH BERHAD
Performance |
| Timeline |
| Mycron Steel Bhd |
| FARM FRESH BERHAD |
Mycron Steel and FARM FRESH Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Mycron Steel and FARM FRESH
The main advantage of trading using opposite Mycron Steel and FARM FRESH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Mycron Steel 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.| Mycron Steel vs. Press Metal Bhd | Mycron Steel vs. PMB Technology Bhd | Mycron Steel vs. Pantech Group Holdings | Mycron Steel vs. CSC Steel Holdings |
| FARM FRESH vs. Nestle Bhd | FARM FRESH vs. British American Tobacco | FARM FRESH vs. Kawan Food Bhd | FARM FRESH vs. Apollo Food Holdings |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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