Correlation Between BASE and Farmers Edge
Can any of the company-specific risk be diversified away by investing in both BASE and Farmers Edge 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 BASE and Farmers Edge into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BASE Inc and Farmers Edge, you can compare the effects of market volatilities on BASE and Farmers Edge 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 BASE with a short position of Farmers Edge. Check out your portfolio center. Please also check ongoing floating volatility patterns of BASE and Farmers Edge.
Diversification Opportunities for BASE and Farmers Edge
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between BASE and Farmers is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding BASE Inc and Farmers Edge in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Farmers Edge and BASE 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 BASE Inc are associated (or correlated) with Farmers Edge. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Farmers Edge has no effect on the direction of BASE i.e., BASE and Farmers Edge go up and down completely randomly.
Pair Corralation between BASE and Farmers Edge
If you would invest 193.00 in BASE Inc on October 20, 2024 and sell it today you would earn a total of 6.00 from holding BASE Inc or generate 3.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 4.76% |
| Values | Daily Returns |
BASE Inc vs. Farmers Edge
Performance |
| Timeline |
| BASE Inc |
| Farmers Edge |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
BASE and Farmers Edge Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BASE and Farmers Edge
The main advantage of trading using opposite BASE and Farmers Edge positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BASE position performs unexpectedly, Farmers Edge 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 Farmers Edge will offset losses from the drop in Farmers Edge's long position.| BASE vs. CurrentC Power | BASE vs. Agent Information Software | BASE vs. Auddia Inc | BASE vs. Maxwell Resource |
| Farmers Edge vs. RenoWorks Software | Farmers Edge vs. 01 Communique Laboratory | Farmers Edge vs. RESAAS Services | Farmers Edge vs. LifeSpeak |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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