Correlation Between FARM FRESH and PMB Technology
Can any of the company-specific risk be diversified away by investing in both FARM FRESH and PMB Technology 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 PMB Technology 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 PMB Technology Bhd, you can compare the effects of market volatilities on FARM FRESH and PMB Technology 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 PMB Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of FARM FRESH and PMB Technology.
Diversification Opportunities for FARM FRESH and PMB Technology
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between FARM and PMB is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding FARM FRESH BERHAD and PMB Technology Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PMB Technology 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 PMB Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PMB Technology Bhd has no effect on the direction of FARM FRESH i.e., FARM FRESH and PMB Technology go up and down completely randomly.
Pair Corralation between FARM FRESH and PMB Technology
Assuming the 90 days trading horizon FARM FRESH BERHAD is expected to generate 0.33 times more return on investment than PMB Technology. However, FARM FRESH BERHAD is 3.04 times less risky than PMB Technology. It trades about -0.03 of its potential returns per unit of risk. PMB Technology Bhd is currently generating about -0.02 per unit of risk. If you would invest 182.00 in FARM FRESH BERHAD on August 31, 2024 and sell it today you would lose (2.00) from holding FARM FRESH BERHAD or give up 1.1% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
FARM FRESH BERHAD vs. PMB Technology Bhd
Performance |
| Timeline |
| FARM FRESH BERHAD |
| PMB Technology Bhd |
FARM FRESH and PMB Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FARM FRESH and PMB Technology
The main advantage of trading using opposite FARM FRESH and PMB Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FARM FRESH position performs unexpectedly, PMB Technology 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 PMB Technology will offset losses from the drop in PMB Technology's 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 |
| PMB Technology vs. Pantech Group Holdings | PMB Technology vs. Coraza Integrated Technology | PMB Technology vs. Choo Bee Metal | PMB Technology 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
Other Complementary Tools
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios |