Correlation Between FARM FRESH and Malayan Banking
Can any of the company-specific risk be diversified away by investing in both FARM FRESH and Malayan Banking 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 Malayan Banking 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 Malayan Banking Bhd, you can compare the effects of market volatilities on FARM FRESH and Malayan Banking 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 Malayan Banking. Check out your portfolio center. Please also check ongoing floating volatility patterns of FARM FRESH and Malayan Banking.
Diversification Opportunities for FARM FRESH and Malayan Banking
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between FARM and Malayan is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding FARM FRESH BERHAD and Malayan Banking Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Malayan Banking 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 Malayan Banking. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Malayan Banking Bhd has no effect on the direction of FARM FRESH i.e., FARM FRESH and Malayan Banking go up and down completely randomly.
Pair Corralation between FARM FRESH and Malayan Banking
Assuming the 90 days trading horizon FARM FRESH BERHAD is expected to generate 2.19 times more return on investment than Malayan Banking. However, FARM FRESH is 2.19 times more volatile than Malayan Banking Bhd. It trades about 0.01 of its potential returns per unit of risk. Malayan Banking Bhd is currently generating about -0.02 per unit of risk. If you would invest 168.00 in FARM FRESH BERHAD on November 2, 2024 and sell it today you would earn a total of 0.00 from holding FARM FRESH BERHAD or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
FARM FRESH BERHAD vs. Malayan Banking Bhd
Performance |
| Timeline |
| FARM FRESH BERHAD |
| Malayan Banking Bhd |
FARM FRESH and Malayan Banking Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FARM FRESH and Malayan Banking
The main advantage of trading using opposite FARM FRESH and Malayan Banking positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FARM FRESH position performs unexpectedly, Malayan Banking 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 Malayan Banking will offset losses from the drop in Malayan Banking's long position.| FARM FRESH vs. Shangri La Hotels | FARM FRESH vs. Hong Leong Bank | FARM FRESH vs. Media Prima Bhd | FARM FRESH vs. Sungei Bagan Rubber |
| Malayan Banking vs. Press Metal Bhd | Malayan Banking vs. Computer Forms Bhd | Malayan Banking vs. Melewar Industrial Group | Malayan Banking vs. Kluang 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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