Correlation Between Magni Tech and FARM FRESH
Can any of the company-specific risk be diversified away by investing in both Magni Tech 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 Magni Tech and FARM FRESH into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Magni Tech Industries and FARM FRESH BERHAD, you can compare the effects of market volatilities on Magni Tech 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 Magni Tech with a short position of FARM FRESH. Check out your portfolio center. Please also check ongoing floating volatility patterns of Magni Tech and FARM FRESH.
Diversification Opportunities for Magni Tech and FARM FRESH
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Magni and FARM is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Magni Tech Industries 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 Magni Tech 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 Magni Tech Industries 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 Magni Tech i.e., Magni Tech and FARM FRESH go up and down completely randomly.
Pair Corralation between Magni Tech and FARM FRESH
Assuming the 90 days trading horizon Magni Tech Industries is expected to generate 1.41 times more return on investment than FARM FRESH. However, Magni Tech is 1.41 times more volatile than FARM FRESH BERHAD. It trades about 0.1 of its potential returns per unit of risk. FARM FRESH BERHAD is currently generating about 0.12 per unit of risk. If you would invest 214.00 in Magni Tech Industries on August 28, 2024 and sell it today you would earn a total of 52.00 from holding Magni Tech Industries or generate 24.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.19% |
| Values | Daily Returns |
Magni Tech Industries vs. FARM FRESH BERHAD
Performance |
| Timeline |
| Magni Tech Industries |
| FARM FRESH BERHAD |
Magni Tech and FARM FRESH Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Magni Tech and FARM FRESH
The main advantage of trading using opposite Magni Tech and FARM FRESH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Magni Tech 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.| Magni Tech vs. Digistar Bhd | Magni Tech vs. Minetech Resources Bhd | Magni Tech vs. OpenSys M Bhd | Magni Tech 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
Other Complementary Tools
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes |