Correlation Between MYFAIR GOLD and Dairy Farm
Can any of the company-specific risk be diversified away by investing in both MYFAIR GOLD and Dairy Farm 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 MYFAIR GOLD and Dairy Farm into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MYFAIR GOLD P and Dairy Farm International, you can compare the effects of market volatilities on MYFAIR GOLD and Dairy Farm 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 MYFAIR GOLD with a short position of Dairy Farm. Check out your portfolio center. Please also check ongoing floating volatility patterns of MYFAIR GOLD and Dairy Farm.
Diversification Opportunities for MYFAIR GOLD and Dairy Farm
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between MYFAIR and Dairy is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding MYFAIR GOLD P and Dairy Farm International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dairy Farm International and MYFAIR GOLD 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 MYFAIR GOLD P are associated (or correlated) with Dairy Farm. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dairy Farm International has no effect on the direction of MYFAIR GOLD i.e., MYFAIR GOLD and Dairy Farm go up and down completely randomly.
Pair Corralation between MYFAIR GOLD and Dairy Farm
Assuming the 90 days horizon MYFAIR GOLD is expected to generate 4.81 times less return on investment than Dairy Farm. But when comparing it to its historical volatility, MYFAIR GOLD P is 1.16 times less risky than Dairy Farm. It trades about 0.04 of its potential returns per unit of risk. Dairy Farm International is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 162.00 in Dairy Farm International on August 25, 2024 and sell it today you would earn a total of 76.00 from holding Dairy Farm International or generate 46.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 98.48% |
| Values | Daily Returns |
MYFAIR GOLD P vs. Dairy Farm International
Performance |
| Timeline |
| MYFAIR GOLD P |
| Dairy Farm International |
MYFAIR GOLD and Dairy Farm Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MYFAIR GOLD and Dairy Farm
The main advantage of trading using opposite MYFAIR GOLD and Dairy Farm positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MYFAIR GOLD position performs unexpectedly, Dairy Farm 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 Dairy Farm will offset losses from the drop in Dairy Farm's long position.| MYFAIR GOLD vs. Franco Nevada | MYFAIR GOLD vs. Agnico Eagle Mines | MYFAIR GOLD vs. Superior Plus Corp | MYFAIR GOLD vs. NMI Holdings |
| Dairy Farm vs. Loblaw Companies Limited | Dairy Farm vs. Superior Plus Corp | Dairy Farm vs. NMI Holdings | Dairy Farm vs. Origin Agritech |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
Other Complementary Tools
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins |