Correlation Between FARM FRESH and Public Bank
Can any of the company-specific risk be diversified away by investing in both FARM FRESH and Public Bank 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 Public Bank 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 Public Bank Bhd, you can compare the effects of market volatilities on FARM FRESH and Public Bank 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 Public Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of FARM FRESH and Public Bank.
Diversification Opportunities for FARM FRESH and Public Bank
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between FARM and Public is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding FARM FRESH BERHAD and Public Bank Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Public Bank 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 Public Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Public Bank Bhd has no effect on the direction of FARM FRESH i.e., FARM FRESH and Public Bank go up and down completely randomly.
Pair Corralation between FARM FRESH and Public Bank
Assuming the 90 days trading horizon FARM FRESH BERHAD is expected to generate 1.92 times more return on investment than Public Bank. However, FARM FRESH is 1.92 times more volatile than Public Bank Bhd. It trades about 0.09 of its potential returns per unit of risk. Public Bank Bhd is currently generating about -0.08 per unit of risk. If you would invest 180.00 in FARM FRESH BERHAD on October 20, 2024 and sell it today you would earn a total of 4.00 from holding FARM FRESH BERHAD or generate 2.22% 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. Public Bank Bhd
Performance |
| Timeline |
| FARM FRESH BERHAD |
| Public Bank Bhd |
FARM FRESH and Public Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FARM FRESH and Public Bank
The main advantage of trading using opposite FARM FRESH and Public Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FARM FRESH position performs unexpectedly, Public Bank 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 Public Bank will offset losses from the drop in Public Bank's long position.| FARM FRESH vs. MClean Technologies Bhd | FARM FRESH vs. Press Metal Bhd | FARM FRESH vs. Shangri La Hotels | FARM FRESH vs. Choo Bee Metal |
| Public Bank vs. KPJ Healthcare Bhd | Public Bank vs. Diversified Gateway Solutions | Public Bank vs. Dataprep Holdings Bhd | Public Bank vs. Eonmetall Group 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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