Correlation Between FARM FRESH and Uchi Technologies
Can any of the company-specific risk be diversified away by investing in both FARM FRESH and Uchi Technologies 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 Uchi Technologies 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 Uchi Technologies Bhd, you can compare the effects of market volatilities on FARM FRESH and Uchi Technologies 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 Uchi Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of FARM FRESH and Uchi Technologies.
Diversification Opportunities for FARM FRESH and Uchi Technologies
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between FARM and Uchi is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding FARM FRESH BERHAD and Uchi Technologies Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Uchi Technologies 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 Uchi Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Uchi Technologies Bhd has no effect on the direction of FARM FRESH i.e., FARM FRESH and Uchi Technologies go up and down completely randomly.
Pair Corralation between FARM FRESH and Uchi Technologies
Assuming the 90 days trading horizon FARM FRESH BERHAD is expected to generate 1.38 times more return on investment than Uchi Technologies. However, FARM FRESH is 1.38 times more volatile than Uchi Technologies Bhd. It trades about 0.15 of its potential returns per unit of risk. Uchi Technologies Bhd is currently generating about 0.02 per unit of risk. If you would invest 145.00 in FARM FRESH BERHAD on August 31, 2024 and sell it today you would earn a total of 42.00 from holding FARM FRESH BERHAD or generate 28.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
FARM FRESH BERHAD vs. Uchi Technologies Bhd
Performance |
| Timeline |
| FARM FRESH BERHAD |
| Uchi Technologies Bhd |
FARM FRESH and Uchi Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FARM FRESH and Uchi Technologies
The main advantage of trading using opposite FARM FRESH and Uchi Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FARM FRESH position performs unexpectedly, Uchi Technologies 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 Uchi Technologies will offset losses from the drop in Uchi Technologies' long position.| FARM FRESH vs. PMB Technology Bhd | FARM FRESH vs. Uchi Technologies Bhd | FARM FRESH vs. Sunzen Biotech Bhd | FARM FRESH vs. Cloudpoint Technology Berhad |
| Uchi Technologies vs. Apollo Food Holdings | Uchi Technologies vs. MI Technovation Bhd | Uchi Technologies vs. Cloudpoint Technology Berhad | Uchi Technologies vs. Cengild Medical Berhad |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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