Correlation Between WIMFARM SA and FARM 51
Can any of the company-specific risk be diversified away by investing in both WIMFARM SA and FARM 51 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 WIMFARM SA and FARM 51 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between WIMFARM SA EO and FARM 51 GROUP, you can compare the effects of market volatilities on WIMFARM SA and FARM 51 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 WIMFARM SA with a short position of FARM 51. Check out your portfolio center. Please also check ongoing floating volatility patterns of WIMFARM SA and FARM 51.
Diversification Opportunities for WIMFARM SA and FARM 51
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between WIMFARM and FARM is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding WIMFARM SA EO and FARM 51 GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FARM 51 GROUP and WIMFARM SA 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 WIMFARM SA EO are associated (or correlated) with FARM 51. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FARM 51 GROUP has no effect on the direction of WIMFARM SA i.e., WIMFARM SA and FARM 51 go up and down completely randomly.
Pair Corralation between WIMFARM SA and FARM 51
Assuming the 90 days horizon WIMFARM SA EO is expected to under-perform the FARM 51. In addition to that, WIMFARM SA is 1.19 times more volatile than FARM 51 GROUP. It trades about -0.06 of its total potential returns per unit of risk. FARM 51 GROUP is currently generating about -0.04 per unit of volatility. If you would invest 678.00 in FARM 51 GROUP on October 14, 2024 and sell it today you would lose (388.00) from holding FARM 51 GROUP or give up 57.23% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
WIMFARM SA EO vs. FARM 51 GROUP
Performance |
| Timeline |
| WIMFARM SA EO |
| FARM 51 GROUP |
WIMFARM SA and FARM 51 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WIMFARM SA and FARM 51
The main advantage of trading using opposite WIMFARM SA and FARM 51 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WIMFARM SA position performs unexpectedly, FARM 51 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 51 will offset losses from the drop in FARM 51's long position.| WIMFARM SA vs. GRENKELEASING Dusseldorf | WIMFARM SA vs. INTERSHOP Communications Aktiengesellschaft | WIMFARM SA vs. United Rentals | WIMFARM SA vs. Iridium Communications |
| FARM 51 vs. Merit Medical Systems | FARM 51 vs. PEPTONIC MEDICAL | FARM 51 vs. Inspire Medical Systems | FARM 51 vs. Fevertree Drinks PLC |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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