Correlation Between Dairy Farm and Media
Can any of the company-specific risk be diversified away by investing in both Dairy Farm and Media 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 Dairy Farm and Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dairy Farm International and Media and Games, you can compare the effects of market volatilities on Dairy Farm and Media 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 Dairy Farm with a short position of Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dairy Farm and Media.
Diversification Opportunities for Dairy Farm and Media
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Dairy and Media is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Dairy Farm International and Media and Games in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Media and Games and Dairy Farm 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 Dairy Farm International are associated (or correlated) with Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Media and Games has no effect on the direction of Dairy Farm i.e., Dairy Farm and Media go up and down completely randomly.
Pair Corralation between Dairy Farm and Media
Assuming the 90 days trading horizon Dairy Farm International is expected to generate 0.57 times more return on investment than Media. However, Dairy Farm International is 1.76 times less risky than Media. It trades about 0.04 of its potential returns per unit of risk. Media and Games is currently generating about -0.01 per unit of risk. If you would invest 210.00 in Dairy Farm International on November 6, 2024 and sell it today you would earn a total of 8.00 from holding Dairy Farm International or generate 3.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dairy Farm International vs. Media and Games
Performance |
| Timeline |
| Dairy Farm International |
| Media and Games |
Dairy Farm and Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dairy Farm and Media
The main advantage of trading using opposite Dairy Farm and Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dairy Farm position performs unexpectedly, Media 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 Media will offset losses from the drop in Media's long position.| Dairy Farm vs. AEGEAN AIRLINES | Dairy Farm vs. GRIFFIN MINING LTD | Dairy Farm vs. Aegean Airlines SA | Dairy Farm vs. United Airlines Holdings |
| Media vs. PARKEN Sport Entertainment | Media vs. Burlington Stores | Media vs. SQUIRREL MEDIA SA | Media vs. ATRESMEDIA |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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