Correlation Between Beston Global and Farm Pride
Can any of the company-specific risk be diversified away by investing in both Beston Global and Farm Pride 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 Beston Global and Farm Pride into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Beston Global Food and Farm Pride Foods, you can compare the effects of market volatilities on Beston Global and Farm Pride 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 Beston Global with a short position of Farm Pride. Check out your portfolio center. Please also check ongoing floating volatility patterns of Beston Global and Farm Pride.
Diversification Opportunities for Beston Global and Farm Pride
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Beston and Farm is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Beston Global Food and Farm Pride Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Farm Pride Foods and Beston Global 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 Beston Global Food are associated (or correlated) with Farm Pride. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Farm Pride Foods has no effect on the direction of Beston Global i.e., Beston Global and Farm Pride go up and down completely randomly.
Pair Corralation between Beston Global and Farm Pride
Assuming the 90 days trading horizon Beston Global is expected to generate 2.17 times less return on investment than Farm Pride. In addition to that, Beston Global is 2.0 times more volatile than Farm Pride Foods. It trades about 0.01 of its total potential returns per unit of risk. Farm Pride Foods is currently generating about 0.04 per unit of volatility. If you would invest 9.00 in Farm Pride Foods on October 19, 2024 and sell it today you would earn a total of 5.00 from holding Farm Pride Foods or generate 55.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Beston Global Food vs. Farm Pride Foods
Performance |
| Timeline |
| Beston Global Food |
| Farm Pride Foods |
Beston Global and Farm Pride Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Beston Global and Farm Pride
The main advantage of trading using opposite Beston Global and Farm Pride positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Beston Global position performs unexpectedly, Farm Pride 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 Pride will offset losses from the drop in Farm Pride's long position.| Beston Global vs. MFF Capital Investments | Beston Global vs. Globe Metals Mining | Beston Global vs. Platinum Asia Investments | Beston Global vs. Mirrabooka Investments |
| Farm Pride vs. Queste Communications | Farm Pride vs. BKI Investment | Farm Pride vs. Home Consortium | Farm Pride vs. Computershare |
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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