Correlation Between DAIRY FARM and Postal Savings
Can any of the company-specific risk be diversified away by investing in both DAIRY FARM and Postal Savings 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 Postal Savings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DAIRY FARM INTL and Postal Savings Bank, you can compare the effects of market volatilities on DAIRY FARM and Postal Savings 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 Postal Savings. Check out your portfolio center. Please also check ongoing floating volatility patterns of DAIRY FARM and Postal Savings.
Diversification Opportunities for DAIRY FARM and Postal Savings
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between DAIRY and Postal is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding DAIRY FARM INTL and Postal Savings Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Postal Savings Bank 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 INTL are associated (or correlated) with Postal Savings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Postal Savings Bank has no effect on the direction of DAIRY FARM i.e., DAIRY FARM and Postal Savings go up and down completely randomly.
Pair Corralation between DAIRY FARM and Postal Savings
Assuming the 90 days trading horizon DAIRY FARM is expected to generate 7.76 times less return on investment than Postal Savings. In addition to that, DAIRY FARM is 1.21 times more volatile than Postal Savings Bank. It trades about 0.01 of its total potential returns per unit of risk. Postal Savings Bank is currently generating about 0.07 per unit of volatility. If you would invest 55.00 in Postal Savings Bank on November 6, 2024 and sell it today you would earn a total of 1.00 from holding Postal Savings Bank or generate 1.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
DAIRY FARM INTL vs. Postal Savings Bank
Performance |
| Timeline |
| DAIRY FARM INTL |
| Postal Savings Bank |
DAIRY FARM and Postal Savings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DAIRY FARM and Postal Savings
The main advantage of trading using opposite DAIRY FARM and Postal Savings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DAIRY FARM position performs unexpectedly, Postal Savings 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 Postal Savings will offset losses from the drop in Postal Savings' long position.| DAIRY FARM vs. National Health Investors | DAIRY FARM vs. PennantPark Investment | DAIRY FARM vs. CDL INVESTMENT | DAIRY FARM vs. Scottish Mortgage Investment |
| Postal Savings vs. POSBO UNSPADRS20YC1 | Postal Savings vs. Oversea Chinese Banking | Postal Savings vs. UNICREDIT SPA ADR | Postal Savings vs. UTD OV BK LOC ADR1 |
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 CEOs Directory module to screen CEOs from public companies around the world.
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