Correlation Between H FARM and ASSOC BR
Can any of the company-specific risk be diversified away by investing in both H FARM and ASSOC BR 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 ASSOC BR 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 ASSOC BR FOODS, you can compare the effects of market volatilities on H FARM and ASSOC BR 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 ASSOC BR. Check out your portfolio center. Please also check ongoing floating volatility patterns of H FARM and ASSOC BR.
Diversification Opportunities for H FARM and ASSOC BR
Very weak diversification
The 3 months correlation between 5JQ and ASSOC is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding H FARM SPA and ASSOC BR FOODS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ASSOC BR FOODS 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 ASSOC BR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ASSOC BR FOODS has no effect on the direction of H FARM i.e., H FARM and ASSOC BR go up and down completely randomly.
Pair Corralation between H FARM and ASSOC BR
Assuming the 90 days horizon H FARM SPA is expected to generate 2.88 times more return on investment than ASSOC BR. However, H FARM is 2.88 times more volatile than ASSOC BR FOODS. It trades about 0.2 of its potential returns per unit of risk. ASSOC BR FOODS is currently generating about -0.09 per unit of risk. If you would invest 10.00 in H FARM SPA on September 24, 2024 and sell it today you would earn a total of 2.00 from holding H FARM SPA or generate 20.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
H FARM SPA vs. ASSOC BR FOODS
Performance |
| Timeline |
| H FARM SPA |
| ASSOC BR FOODS |
H FARM and ASSOC BR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with H FARM and ASSOC BR
The main advantage of trading using opposite H FARM and ASSOC BR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if H FARM position performs unexpectedly, ASSOC BR 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 ASSOC BR will offset losses from the drop in ASSOC BR's long position.| H FARM vs. Blackstone Group | H FARM vs. The Bank of | H FARM vs. Ameriprise Financial | H FARM vs. State Street |
| ASSOC BR vs. Yuexiu Transport Infrastructure | ASSOC BR vs. Dairy Farm International | ASSOC BR vs. H FARM SPA | ASSOC BR vs. AUST AGRICULTURAL |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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