Correlation Between Axiata Group and FARM FRESH
Can any of the company-specific risk be diversified away by investing in both Axiata Group and FARM FRESH 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 Axiata Group and FARM FRESH into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Axiata Group Bhd and FARM FRESH BERHAD, you can compare the effects of market volatilities on Axiata Group and FARM FRESH 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 Axiata Group with a short position of FARM FRESH. Check out your portfolio center. Please also check ongoing floating volatility patterns of Axiata Group and FARM FRESH.
Diversification Opportunities for Axiata Group and FARM FRESH
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Axiata and FARM is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Axiata Group Bhd and FARM FRESH BERHAD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FARM FRESH BERHAD and Axiata Group 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 Axiata Group Bhd are associated (or correlated) with FARM FRESH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FARM FRESH BERHAD has no effect on the direction of Axiata Group i.e., Axiata Group and FARM FRESH go up and down completely randomly.
Pair Corralation between Axiata Group and FARM FRESH
Assuming the 90 days trading horizon Axiata Group Bhd is expected to under-perform the FARM FRESH. In addition to that, Axiata Group is 1.15 times more volatile than FARM FRESH BERHAD. It trades about 0.0 of its total potential returns per unit of risk. FARM FRESH BERHAD is currently generating about 0.11 per unit of volatility. If you would invest 108.00 in FARM FRESH BERHAD on August 28, 2024 and sell it today you would earn a total of 71.00 from holding FARM FRESH BERHAD or generate 65.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.71% |
| Values | Daily Returns |
Axiata Group Bhd vs. FARM FRESH BERHAD
Performance |
| Timeline |
| Axiata Group Bhd |
| FARM FRESH BERHAD |
Axiata Group and FARM FRESH Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Axiata Group and FARM FRESH
The main advantage of trading using opposite Axiata Group and FARM FRESH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Axiata Group position performs unexpectedly, FARM FRESH 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 FARM FRESH will offset losses from the drop in FARM FRESH's long position.| Axiata Group vs. Digistar Bhd | Axiata Group vs. Minetech Resources Bhd | Axiata Group vs. OpenSys M Bhd | Axiata Group vs. Insas Bhd |
| FARM FRESH vs. SSF Home Group | FARM FRESH vs. Melewar Industrial Group | FARM FRESH vs. KPJ Healthcare Bhd | FARM FRESH vs. Al Aqar Healthcare |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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