Correlation Between FARM FRESH and Lyc Healthcare
Can any of the company-specific risk be diversified away by investing in both FARM FRESH and Lyc Healthcare 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 FARM FRESH and Lyc Healthcare into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FARM FRESH BERHAD and Lyc Healthcare Bhd, you can compare the effects of market volatilities on FARM FRESH and Lyc Healthcare 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 FARM FRESH with a short position of Lyc Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of FARM FRESH and Lyc Healthcare.
Diversification Opportunities for FARM FRESH and Lyc Healthcare
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between FARM and Lyc is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding FARM FRESH BERHAD and Lyc Healthcare Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lyc Healthcare Bhd and FARM FRESH 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 FARM FRESH BERHAD are associated (or correlated) with Lyc Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lyc Healthcare Bhd has no effect on the direction of FARM FRESH i.e., FARM FRESH and Lyc Healthcare go up and down completely randomly.
Pair Corralation between FARM FRESH and Lyc Healthcare
Assuming the 90 days trading horizon FARM FRESH BERHAD is expected to under-perform the Lyc Healthcare. But the stock apears to be less risky and, when comparing its historical volatility, FARM FRESH BERHAD is 4.11 times less risky than Lyc Healthcare. The stock trades about -0.07 of its potential returns per unit of risk. The Lyc Healthcare Bhd is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 8.50 in Lyc Healthcare Bhd on August 28, 2024 and sell it today you would earn a total of 0.50 from holding Lyc Healthcare Bhd or generate 5.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
FARM FRESH BERHAD vs. Lyc Healthcare Bhd
Performance |
| Timeline |
| FARM FRESH BERHAD |
| Lyc Healthcare Bhd |
FARM FRESH and Lyc Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FARM FRESH and Lyc Healthcare
The main advantage of trading using opposite FARM FRESH and Lyc Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FARM FRESH position performs unexpectedly, Lyc Healthcare 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 Lyc Healthcare will offset losses from the drop in Lyc Healthcare's long position.| FARM FRESH vs. SSF Home Group | FARM FRESH vs. Melewar Industrial Group | FARM FRESH vs. KPJ Healthcare Bhd | FARM FRESH vs. Al Aqar Healthcare |
| Lyc Healthcare vs. Digistar Bhd | Lyc Healthcare vs. Minetech Resources Bhd | Lyc Healthcare vs. OpenSys M Bhd | Lyc Healthcare vs. Insas 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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