Correlation Between COUNTRY GARDEN and DAIRY FARM
Can any of the company-specific risk be diversified away by investing in both COUNTRY GARDEN and DAIRY FARM 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 COUNTRY GARDEN and DAIRY FARM into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between COUNTRY GARDEN SVDL 0001 and DAIRY FARM INTL, you can compare the effects of market volatilities on COUNTRY GARDEN and DAIRY FARM 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 COUNTRY GARDEN with a short position of DAIRY FARM. Check out your portfolio center. Please also check ongoing floating volatility patterns of COUNTRY GARDEN and DAIRY FARM.
Diversification Opportunities for COUNTRY GARDEN and DAIRY FARM
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between COUNTRY and DAIRY is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding COUNTRY GARDEN SVDL 0001 and DAIRY FARM INTL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DAIRY FARM INTL and COUNTRY GARDEN 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 COUNTRY GARDEN SVDL 0001 are associated (or correlated) with DAIRY FARM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DAIRY FARM INTL has no effect on the direction of COUNTRY GARDEN i.e., COUNTRY GARDEN and DAIRY FARM go up and down completely randomly.
Pair Corralation between COUNTRY GARDEN and DAIRY FARM
Assuming the 90 days horizon COUNTRY GARDEN is expected to generate 10.42 times less return on investment than DAIRY FARM. In addition to that, COUNTRY GARDEN is 1.89 times more volatile than DAIRY FARM INTL. It trades about 0.01 of its total potential returns per unit of risk. DAIRY FARM INTL is currently generating about 0.25 per unit of volatility. If you would invest 218.00 in DAIRY FARM INTL on August 30, 2024 and sell it today you would earn a total of 18.00 from holding DAIRY FARM INTL or generate 8.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
COUNTRY GARDEN SVDL 0001 vs. DAIRY FARM INTL
Performance |
| Timeline |
| COUNTRY GARDEN SVDL |
| DAIRY FARM INTL |
COUNTRY GARDEN and DAIRY FARM Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with COUNTRY GARDEN and DAIRY FARM
The main advantage of trading using opposite COUNTRY GARDEN and DAIRY FARM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if COUNTRY GARDEN position performs unexpectedly, DAIRY FARM 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 DAIRY FARM will offset losses from the drop in DAIRY FARM's long position.| COUNTRY GARDEN vs. DAIRY FARM INTL | COUNTRY GARDEN vs. Hitachi Construction Machinery | COUNTRY GARDEN vs. DICKS Sporting Goods | COUNTRY GARDEN vs. TITANIUM TRANSPORTGROUP |
| DAIRY FARM vs. Apple Inc | DAIRY FARM vs. Apple Inc | DAIRY FARM vs. Superior Plus Corp | DAIRY FARM vs. SIVERS SEMICONDUCTORS AB |
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 Stocks Directory module to find actively traded stocks across global markets.
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