Correlation Between Figaro Coffee and Crown Asia
Can any of the company-specific risk be diversified away by investing in both Figaro Coffee and Crown Asia 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 Figaro Coffee and Crown Asia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Figaro Coffee Group and Crown Asia Chemicals, you can compare the effects of market volatilities on Figaro Coffee and Crown Asia 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 Figaro Coffee with a short position of Crown Asia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Figaro Coffee and Crown Asia.
Diversification Opportunities for Figaro Coffee and Crown Asia
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Figaro and Crown is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Figaro Coffee Group and Crown Asia Chemicals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Crown Asia Chemicals and Figaro Coffee 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 Figaro Coffee Group are associated (or correlated) with Crown Asia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Crown Asia Chemicals has no effect on the direction of Figaro Coffee i.e., Figaro Coffee and Crown Asia go up and down completely randomly.
Pair Corralation between Figaro Coffee and Crown Asia
Assuming the 90 days trading horizon Figaro Coffee Group is expected to under-perform the Crown Asia. In addition to that, Figaro Coffee is 1.22 times more volatile than Crown Asia Chemicals. It trades about -0.33 of its total potential returns per unit of risk. Crown Asia Chemicals is currently generating about -0.08 per unit of volatility. If you would invest 193.00 in Crown Asia Chemicals on August 24, 2024 and sell it today you would lose (6.00) from holding Crown Asia Chemicals or give up 3.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Figaro Coffee Group vs. Crown Asia Chemicals
Performance |
| Timeline |
| Figaro Coffee Group |
| Crown Asia Chemicals |
Figaro Coffee and Crown Asia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Figaro Coffee and Crown Asia
The main advantage of trading using opposite Figaro Coffee and Crown Asia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Figaro Coffee position performs unexpectedly, Crown Asia 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 Crown Asia will offset losses from the drop in Crown Asia's long position.| Figaro Coffee vs. Jollibee Foods Corp | Figaro Coffee vs. Pacificonline Systems | Figaro Coffee vs. Allhome Corp | Figaro Coffee vs. LFM Properties Corp |
| Crown Asia vs. Allhome Corp | Crown Asia vs. Jollibee Foods Corp | Crown Asia vs. LFM Properties Corp | Crown Asia vs. PXP Energy Corp |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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