Correlation Between Lysaght Galvanized and FARM FRESH
Can any of the company-specific risk be diversified away by investing in both Lysaght Galvanized and FARM FRESH 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 FRESH 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 FRESH BERHAD, you can compare the effects of market volatilities on Lysaght Galvanized and FARM FRESH 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 FRESH. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lysaght Galvanized and FARM FRESH.
Diversification Opportunities for Lysaght Galvanized and FARM FRESH
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lysaght and FARM is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Lysaght Galvanized Steel and FARM FRESH BERHAD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FARM FRESH BERHAD 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 FRESH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FARM FRESH BERHAD has no effect on the direction of Lysaght Galvanized i.e., Lysaght Galvanized and FARM FRESH go up and down completely randomly.
Pair Corralation between Lysaght Galvanized and FARM FRESH
Assuming the 90 days trading horizon Lysaght Galvanized Steel is expected to under-perform the FARM FRESH. But the stock apears to be less risky and, when comparing its historical volatility, Lysaght Galvanized Steel is 1.19 times less risky than FARM FRESH. The stock trades about -0.2 of its potential returns per unit of risk. The FARM FRESH BERHAD is currently generating about -0.14 of returns per unit of risk over similar time horizon. If you would invest 183.00 in FARM FRESH BERHAD on November 3, 2024 and sell it today you would lose (10.00) from holding FARM FRESH BERHAD or give up 5.46% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Lysaght Galvanized Steel vs. FARM FRESH BERHAD
Performance |
| Timeline |
| Lysaght Galvanized Steel |
| FARM FRESH BERHAD |
Lysaght Galvanized and FARM FRESH Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lysaght Galvanized and FARM FRESH
The main advantage of trading using opposite Lysaght Galvanized and FARM FRESH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lysaght Galvanized position performs unexpectedly, FARM FRESH 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 FRESH will offset losses from the drop in FARM FRESH's long position.| Lysaght Galvanized vs. ONETECH SOLUTIONS HOLDINGS | Lysaght Galvanized vs. SFP Tech Holdings | Lysaght Galvanized vs. Globetronics Tech Bhd | Lysaght Galvanized vs. Computer Forms Bhd |
| FARM FRESH vs. Press Metal Bhd | FARM FRESH vs. TAS Offshore Bhd | FARM FRESH vs. Aeon Credit Service | FARM FRESH vs. Bank Islam Malaysia |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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