Correlation Between Central Industrial and Farm Price
Can any of the company-specific risk be diversified away by investing in both Central 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 Central 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 Central Industrial Corp and Farm Price Holdings, you can compare the effects of market volatilities on Central 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 Central Industrial with a short position of Farm Price. Check out your portfolio center. Please also check ongoing floating volatility patterns of Central Industrial and Farm Price.
Diversification Opportunities for Central Industrial and Farm Price
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Central and Farm is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Central Industrial Corp 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 Central 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 Central Industrial Corp 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 Central Industrial i.e., Central Industrial and Farm Price go up and down completely randomly.
Pair Corralation between Central Industrial and Farm Price
Assuming the 90 days trading horizon Central Industrial Corp is expected to generate 0.83 times more return on investment than Farm Price. However, Central Industrial Corp is 1.2 times less risky than Farm Price. It trades about 0.09 of its potential returns per unit of risk. Farm Price Holdings is currently generating about -0.52 per unit of risk. If you would invest 86.00 in Central Industrial Corp on October 25, 2024 and sell it today you would earn a total of 2.00 from holding Central Industrial Corp or generate 2.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Central Industrial Corp vs. Farm Price Holdings
Performance |
| Timeline |
| Central Industrial Corp |
| Farm Price Holdings |
Central Industrial and Farm Price Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Central Industrial and Farm Price
The main advantage of trading using opposite Central Industrial and Farm Price positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Central 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.| Central Industrial vs. Sunway Construction Group | Central Industrial vs. JAKS Resources Bhd | Central Industrial vs. PESTECH International Bhd | Central Industrial vs. Tadmax Resources Berhad |
| Farm Price vs. Central Industrial Corp | Farm Price vs. SSF Home Group | Farm Price vs. Press Metal Bhd | Farm Price vs. Lysaght Galvanized Steel |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
Other Complementary Tools
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Bonds Directory Find actively traded corporate debentures issued by US companies |