Correlation Between H FARM and WIMFARM SA
Can any of the company-specific risk be diversified away by investing in both H FARM and WIMFARM SA 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 H FARM and WIMFARM SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between H FARM SPA and WIMFARM SA EO, you can compare the effects of market volatilities on H FARM and WIMFARM SA 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 H FARM with a short position of WIMFARM SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of H FARM and WIMFARM SA.
Diversification Opportunities for H FARM and WIMFARM SA
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between 5JQ and WIMFARM is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding H FARM SPA and WIMFARM SA EO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WIMFARM SA EO and H FARM 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 H FARM SPA are associated (or correlated) with WIMFARM SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WIMFARM SA EO has no effect on the direction of H FARM i.e., H FARM and WIMFARM SA go up and down completely randomly.
Pair Corralation between H FARM and WIMFARM SA
Assuming the 90 days horizon H FARM SPA is expected to generate 1.44 times more return on investment than WIMFARM SA. However, H FARM is 1.44 times more volatile than WIMFARM SA EO. It trades about 0.0 of its potential returns per unit of risk. WIMFARM SA EO is currently generating about -0.08 per unit of risk. If you would invest 21.00 in H FARM SPA on August 24, 2024 and sell it today you would lose (9.00) from holding H FARM SPA or give up 42.86% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
H FARM SPA vs. WIMFARM SA EO
Performance |
| Timeline |
| H FARM SPA |
| WIMFARM SA EO |
H FARM and WIMFARM SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with H FARM and WIMFARM SA
The main advantage of trading using opposite H FARM and WIMFARM SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if H FARM position performs unexpectedly, WIMFARM SA 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 WIMFARM SA will offset losses from the drop in WIMFARM SA's long position.| H FARM vs. The Bank of | H FARM vs. Ares Management Corp | H FARM vs. Superior Plus Corp | H FARM vs. NMI Holdings |
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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.
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