Correlation Between ALEFARM BREWING and FEMALE HEALTH
Can any of the company-specific risk be diversified away by investing in both ALEFARM BREWING and FEMALE HEALTH 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 ALEFARM BREWING and FEMALE HEALTH into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ALEFARM BREWING DK 05 and FEMALE HEALTH, you can compare the effects of market volatilities on ALEFARM BREWING and FEMALE HEALTH 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 ALEFARM BREWING with a short position of FEMALE HEALTH. Check out your portfolio center. Please also check ongoing floating volatility patterns of ALEFARM BREWING and FEMALE HEALTH.
Diversification Opportunities for ALEFARM BREWING and FEMALE HEALTH
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between ALEFARM and FEMALE is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding ALEFARM BREWING DK 05 and FEMALE HEALTH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FEMALE HEALTH and ALEFARM BREWING 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 ALEFARM BREWING DK 05 are associated (or correlated) with FEMALE HEALTH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FEMALE HEALTH has no effect on the direction of ALEFARM BREWING i.e., ALEFARM BREWING and FEMALE HEALTH go up and down completely randomly.
Pair Corralation between ALEFARM BREWING and FEMALE HEALTH
Assuming the 90 days horizon ALEFARM BREWING DK 05 is expected to under-perform the FEMALE HEALTH. In addition to that, ALEFARM BREWING is 1.04 times more volatile than FEMALE HEALTH. It trades about -0.09 of its total potential returns per unit of risk. FEMALE HEALTH is currently generating about 0.05 per unit of volatility. If you would invest 67.00 in FEMALE HEALTH on September 13, 2024 and sell it today you would earn a total of 2.00 from holding FEMALE HEALTH or generate 2.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ALEFARM BREWING DK 05 vs. FEMALE HEALTH
Performance |
| Timeline |
| ALEFARM BREWING DK |
| FEMALE HEALTH |
ALEFARM BREWING and FEMALE HEALTH Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ALEFARM BREWING and FEMALE HEALTH
The main advantage of trading using opposite ALEFARM BREWING and FEMALE HEALTH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ALEFARM BREWING position performs unexpectedly, FEMALE HEALTH 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 FEMALE HEALTH will offset losses from the drop in FEMALE HEALTH's long position.| ALEFARM BREWING vs. MOLSON RS BEVERAGE | ALEFARM BREWING vs. Superior Plus Corp | ALEFARM BREWING vs. SIVERS SEMICONDUCTORS AB | ALEFARM BREWING vs. NorAm Drilling AS |
| FEMALE HEALTH vs. Apple Inc | FEMALE HEALTH vs. Apple Inc | FEMALE HEALTH vs. Apple Inc | FEMALE HEALTH vs. Apple Inc |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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