Correlation Between Lysaght Galvanized and Farm Price
Can any of the company-specific risk be diversified away by investing in both Lysaght Galvanized 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 Lysaght Galvanized and Farm Price into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lysaght Galvanized Steel and Farm Price Holdings, you can compare the effects of market volatilities on Lysaght Galvanized 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 Lysaght Galvanized with a short position of Farm Price. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lysaght Galvanized and Farm Price.
Diversification Opportunities for Lysaght Galvanized and Farm Price
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Lysaght and Farm is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Lysaght Galvanized Steel 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 Lysaght Galvanized 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 Lysaght Galvanized Steel 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 Lysaght Galvanized i.e., Lysaght Galvanized and Farm Price go up and down completely randomly.
Pair Corralation between Lysaght Galvanized and Farm Price
Assuming the 90 days trading horizon Lysaght Galvanized Steel is expected to generate 0.93 times more return on investment than Farm Price. However, Lysaght Galvanized Steel is 1.07 times less risky than Farm Price. It trades about -0.04 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 277.00 in Lysaght Galvanized Steel on October 25, 2024 and sell it today you would lose (4.00) from holding Lysaght Galvanized Steel or give up 1.44% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lysaght Galvanized Steel vs. Farm Price Holdings
Performance |
| Timeline |
| Lysaght Galvanized Steel |
| Farm Price Holdings |
Lysaght Galvanized and Farm Price Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lysaght Galvanized and Farm Price
The main advantage of trading using opposite Lysaght Galvanized and Farm Price positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lysaght Galvanized 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.| Lysaght Galvanized vs. Bank Islam Malaysia | Lysaght Galvanized vs. Tex Cycle Technology | Lysaght Galvanized vs. RHB Bank Bhd | Lysaght Galvanized vs. Cloudpoint Technology 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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