Correlation Between FARM FRESH and YX Precious
Can any of the company-specific risk be diversified away by investing in both FARM FRESH and YX Precious 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 YX Precious 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 YX Precious Metals, you can compare the effects of market volatilities on FARM FRESH and YX Precious 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 YX Precious. Check out your portfolio center. Please also check ongoing floating volatility patterns of FARM FRESH and YX Precious.
Diversification Opportunities for FARM FRESH and YX Precious
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between FARM and 0250 is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding FARM FRESH BERHAD and YX Precious Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on YX Precious Metals 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 YX Precious. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of YX Precious Metals has no effect on the direction of FARM FRESH i.e., FARM FRESH and YX Precious go up and down completely randomly.
Pair Corralation between FARM FRESH and YX Precious
Assuming the 90 days trading horizon FARM FRESH is expected to generate 2.45 times less return on investment than YX Precious. But when comparing it to its historical volatility, FARM FRESH BERHAD is 1.96 times less risky than YX Precious. It trades about 0.03 of its potential returns per unit of risk. YX Precious Metals is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 20.00 in YX Precious Metals on August 24, 2024 and sell it today you would earn a total of 6.00 from holding YX Precious Metals or generate 30.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
FARM FRESH BERHAD vs. YX Precious Metals
Performance |
| Timeline |
| FARM FRESH BERHAD |
| YX Precious Metals |
FARM FRESH and YX Precious Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FARM FRESH and YX Precious
The main advantage of trading using opposite FARM FRESH and YX Precious positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FARM FRESH position performs unexpectedly, YX Precious 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 YX Precious will offset losses from the drop in YX Precious' long position.| FARM FRESH vs. Nestle Bhd | FARM FRESH vs. FGV Holdings Bhd | FARM FRESH vs. Kawan Food Bhd | FARM FRESH vs. Apollo Food Holdings |
| YX Precious vs. Shangri La Hotels | YX Precious vs. Datasonic Group Bhd | YX Precious vs. RHB Bank Bhd | YX Precious vs. Kossan Rubber Industries |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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