Correlation Between Sapura Industrial and Farm Price
Can any of the company-specific risk be diversified away by investing in both Sapura Industrial and Farm Price 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 Sapura Industrial and Farm Price into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sapura Industrial Bhd and Farm Price Holdings, you can compare the effects of market volatilities on Sapura Industrial and Farm Price 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 Sapura Industrial with a short position of Farm Price. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sapura Industrial and Farm Price.
Diversification Opportunities for Sapura Industrial and Farm Price
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sapura and Farm is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Sapura Industrial Bhd and Farm Price Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Farm Price Holdings and Sapura Industrial 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 Sapura Industrial Bhd are associated (or correlated) with Farm Price. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Farm Price Holdings has no effect on the direction of Sapura Industrial i.e., Sapura Industrial and Farm Price go up and down completely randomly.
Pair Corralation between Sapura Industrial and Farm Price
Assuming the 90 days trading horizon Sapura Industrial Bhd is expected to generate 0.79 times more return on investment than Farm Price. However, Sapura Industrial Bhd is 1.26 times less risky than Farm Price. It trades about 0.08 of its potential returns per unit of risk. Farm Price Holdings is currently generating about 0.01 per unit of risk. If you would invest 82.00 in Sapura Industrial Bhd on September 1, 2024 and sell it today you would earn a total of 2.00 from holding Sapura Industrial Bhd or generate 2.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sapura Industrial Bhd vs. Farm Price Holdings
Performance |
| Timeline |
| Sapura Industrial Bhd |
| Farm Price Holdings |
Sapura Industrial and Farm Price Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sapura Industrial and Farm Price
The main advantage of trading using opposite Sapura Industrial and Farm Price positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sapura Industrial position performs unexpectedly, Farm Price 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 Price will offset losses from the drop in Farm Price's long position.| Sapura Industrial vs. Digistar Bhd | Sapura Industrial vs. Minetech Resources Bhd | Sapura Industrial vs. Swift Haulage Bhd | Sapura Industrial vs. Bina Darulaman Bhd |
| Farm Price vs. Malayan Banking Bhd | Farm Price vs. Public Bank Bhd | Farm Price vs. Petronas Chemicals Group | Farm Price vs. Tenaga Nasional Bhd |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
Other Complementary Tools
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital |