Correlation Between FARM 51 and Dairy Farm
Can any of the company-specific risk be diversified away by investing in both FARM 51 and Dairy Farm 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 FARM 51 and Dairy Farm into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FARM 51 GROUP and Dairy Farm International, you can compare the effects of market volatilities on FARM 51 and Dairy Farm 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 FARM 51 with a short position of Dairy Farm. Check out your portfolio center. Please also check ongoing floating volatility patterns of FARM 51 and Dairy Farm.
Diversification Opportunities for FARM 51 and Dairy Farm
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between FARM and Dairy is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding FARM 51 GROUP and Dairy Farm International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dairy Farm International and FARM 51 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 FARM 51 GROUP are associated (or correlated) with Dairy Farm. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dairy Farm International has no effect on the direction of FARM 51 i.e., FARM 51 and Dairy Farm go up and down completely randomly.
Pair Corralation between FARM 51 and Dairy Farm
Assuming the 90 days horizon FARM 51 GROUP is expected to generate 1.06 times more return on investment than Dairy Farm. However, FARM 51 is 1.06 times more volatile than Dairy Farm International. It trades about 0.1 of its potential returns per unit of risk. Dairy Farm International is currently generating about -0.14 per unit of risk. If you would invest 297.00 in FARM 51 GROUP on November 1, 2024 and sell it today you would earn a total of 11.00 from holding FARM 51 GROUP or generate 3.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
FARM 51 GROUP vs. Dairy Farm International
Performance |
| Timeline |
| FARM 51 GROUP |
| Dairy Farm International |
FARM 51 and Dairy Farm Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FARM 51 and Dairy Farm
The main advantage of trading using opposite FARM 51 and Dairy Farm positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FARM 51 position performs unexpectedly, Dairy Farm 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 Dairy Farm will offset losses from the drop in Dairy Farm's long position.| FARM 51 vs. Eagle Materials | FARM 51 vs. The Yokohama Rubber | FARM 51 vs. Altair Engineering | FARM 51 vs. Delta Air Lines |
| Dairy Farm vs. USWE SPORTS AB | Dairy Farm vs. SPORT LISBOA E | Dairy Farm vs. PNC Financial Services | Dairy Farm vs. Mitsui Chemicals |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
Other Complementary Tools
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals |