Correlation Between Sapura Energy and FARM FRESH
Can any of the company-specific risk be diversified away by investing in both Sapura Energy 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 Sapura Energy and FARM FRESH into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sapura Energy Bhd and FARM FRESH BERHAD, you can compare the effects of market volatilities on Sapura Energy 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 Sapura Energy with a short position of FARM FRESH. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sapura Energy and FARM FRESH.
Diversification Opportunities for Sapura Energy and FARM FRESH
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Sapura and FARM is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Sapura Energy 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 Sapura Energy 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 Sapura Energy 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 Sapura Energy i.e., Sapura Energy and FARM FRESH go up and down completely randomly.
Pair Corralation between Sapura Energy and FARM FRESH
Assuming the 90 days trading horizon Sapura Energy Bhd is expected to generate 8.04 times more return on investment than FARM FRESH. However, Sapura Energy is 8.04 times more volatile than FARM FRESH BERHAD. It trades about 0.06 of its potential returns per unit of risk. FARM FRESH BERHAD is currently generating about 0.01 per unit of risk. If you would invest 3.50 in Sapura Energy Bhd on November 2, 2024 and sell it today you would earn a total of 0.00 from holding Sapura Energy Bhd or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sapura Energy Bhd vs. FARM FRESH BERHAD
Performance |
| Timeline |
| Sapura Energy Bhd |
| FARM FRESH BERHAD |
Sapura Energy and FARM FRESH Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sapura Energy and FARM FRESH
The main advantage of trading using opposite Sapura Energy and FARM FRESH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sapura Energy 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.| Sapura Energy vs. Malayan Banking Bhd | Sapura Energy vs. Public Bank Bhd | Sapura Energy vs. Petronas Chemicals Group | Sapura Energy vs. Tenaga Nasional Bhd |
| FARM FRESH vs. Shangri La Hotels | FARM FRESH vs. Hong Leong Bank | FARM FRESH vs. Media Prima Bhd | FARM FRESH vs. Sungei Bagan Rubber |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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