Correlation Between Berjaya Food and Farm Price
Can any of the company-specific risk be diversified away by investing in both Berjaya Food 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 Berjaya Food and Farm Price into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Berjaya Food Bhd and Farm Price Holdings, you can compare the effects of market volatilities on Berjaya Food 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 Berjaya Food with a short position of Farm Price. Check out your portfolio center. Please also check ongoing floating volatility patterns of Berjaya Food and Farm Price.
Diversification Opportunities for Berjaya Food and Farm Price
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Berjaya and Farm is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Berjaya Food Bhd 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 Berjaya Food 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 Berjaya Food Bhd 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 Berjaya Food i.e., Berjaya Food and Farm Price go up and down completely randomly.
Pair Corralation between Berjaya Food and Farm Price
Assuming the 90 days trading horizon Berjaya Food Bhd is expected to under-perform the Farm Price. In addition to that, Berjaya Food is 2.52 times more volatile than Farm Price Holdings. It trades about -0.27 of its total potential returns per unit of risk. Farm Price Holdings is currently generating about 0.01 per unit of volatility. 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 Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Berjaya Food Bhd vs. Farm Price Holdings
Performance |
| Timeline |
| Berjaya Food Bhd |
| Farm Price Holdings |
Berjaya Food and Farm Price Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Berjaya Food and Farm Price
The main advantage of trading using opposite Berjaya Food and Farm Price positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Berjaya Food 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.| Berjaya Food vs. Duopharma Biotech Bhd | Berjaya Food vs. Choo Bee Metal | Berjaya Food vs. Aeon Credit Service | Berjaya Food vs. Supercomnet Technologies Bhd |
| Farm Price vs. Malayan Banking Bhd | Farm Price vs. Public Bank Bhd | Farm Price vs. Petronas Chemicals Group | Farm Price vs. Tenaga Nasional 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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