Correlation Between FARM 51 and Hong Kong
Can any of the company-specific risk be diversified away by investing in both FARM 51 and Hong Kong 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 Hong Kong 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 Hong Kong Exchanges, you can compare the effects of market volatilities on FARM 51 and Hong Kong 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 Hong Kong. Check out your portfolio center. Please also check ongoing floating volatility patterns of FARM 51 and Hong Kong.
Diversification Opportunities for FARM 51 and Hong Kong
Very weak diversification
The 3 months correlation between FARM and Hong is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding FARM 51 GROUP and Hong Kong Exchanges in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hong Kong Exchanges 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 Hong Kong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hong Kong Exchanges has no effect on the direction of FARM 51 i.e., FARM 51 and Hong Kong go up and down completely randomly.
Pair Corralation between FARM 51 and Hong Kong
Assuming the 90 days horizon FARM 51 GROUP is expected to generate 3.1 times more return on investment than Hong Kong. However, FARM 51 is 3.1 times more volatile than Hong Kong Exchanges. It trades about -0.1 of its potential returns per unit of risk. Hong Kong Exchanges is currently generating about -0.48 per unit of risk. If you would invest 306.00 in FARM 51 GROUP on October 11, 2024 and sell it today you would lose (16.00) from holding FARM 51 GROUP or give up 5.23% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
FARM 51 GROUP vs. Hong Kong Exchanges
Performance |
| Timeline |
| FARM 51 GROUP |
| Hong Kong Exchanges |
FARM 51 and Hong Kong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FARM 51 and Hong Kong
The main advantage of trading using opposite FARM 51 and Hong Kong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FARM 51 position performs unexpectedly, Hong Kong 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 Hong Kong will offset losses from the drop in Hong Kong's long position.| FARM 51 vs. FEMALE HEALTH | FARM 51 vs. Playa Hotels Resorts | FARM 51 vs. MIRAMAR HOTEL INV | FARM 51 vs. NIGHTINGALE HEALTH EO |
| Hong Kong vs. LPKF Laser Electronics | Hong Kong vs. Hanison Construction Holdings | Hong Kong vs. ITALIAN WINE BRANDS | Hong Kong vs. FARM 51 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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