Correlation Between DAIRY FARM and COUNTRY GARDEN
Can any of the company-specific risk be diversified away by investing in both DAIRY FARM and COUNTRY GARDEN 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 COUNTRY GARDEN 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 COUNTRY GARDEN SVDL 0001, you can compare the effects of market volatilities on DAIRY FARM and COUNTRY GARDEN 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 COUNTRY GARDEN. Check out your portfolio center. Please also check ongoing floating volatility patterns of DAIRY FARM and COUNTRY GARDEN.
Diversification Opportunities for DAIRY FARM and COUNTRY GARDEN
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between DAIRY and COUNTRY is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding DAIRY FARM INTL and COUNTRY GARDEN SVDL 0001 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COUNTRY GARDEN SVDL 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 COUNTRY GARDEN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COUNTRY GARDEN SVDL has no effect on the direction of DAIRY FARM i.e., DAIRY FARM and COUNTRY GARDEN go up and down completely randomly.
Pair Corralation between DAIRY FARM and COUNTRY GARDEN
Assuming the 90 days trading horizon DAIRY FARM INTL is expected to under-perform the COUNTRY GARDEN. But the stock apears to be less risky and, when comparing its historical volatility, DAIRY FARM INTL is 4.05 times less risky than COUNTRY GARDEN. The stock trades about -0.01 of its potential returns per unit of risk. The COUNTRY GARDEN SVDL 0001 is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 55.00 in COUNTRY GARDEN SVDL 0001 on November 28, 2024 and sell it today you would earn a total of 7.00 from holding COUNTRY GARDEN SVDL 0001 or generate 12.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.79% |
| Values | Daily Returns |
DAIRY FARM INTL vs. COUNTRY GARDEN SVDL 0001
Performance |
| Timeline |
| DAIRY FARM INTL |
| COUNTRY GARDEN SVDL |
DAIRY FARM and COUNTRY GARDEN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DAIRY FARM and COUNTRY GARDEN
The main advantage of trading using opposite DAIRY FARM and COUNTRY GARDEN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DAIRY FARM position performs unexpectedly, COUNTRY GARDEN 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 COUNTRY GARDEN will offset losses from the drop in COUNTRY GARDEN's long position.| DAIRY FARM vs. CARSALESCOM | DAIRY FARM vs. Japan Medical Dynamic | DAIRY FARM vs. Genertec Universal Medical | DAIRY FARM vs. GEELY AUTOMOBILE |
| COUNTRY GARDEN vs. ZURICH INSURANCE GROUP | COUNTRY GARDEN vs. AUTO TRADER ADR | COUNTRY GARDEN vs. Singapore Reinsurance | COUNTRY GARDEN vs. Zurich Insurance Group |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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