Correlation Between Farmers Edge and ProStar Holdings
Can any of the company-specific risk be diversified away by investing in both Farmers Edge and ProStar Holdings 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 Farmers Edge and ProStar Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Farmers Edge and ProStar Holdings, you can compare the effects of market volatilities on Farmers Edge and ProStar Holdings 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 Farmers Edge with a short position of ProStar Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Farmers Edge and ProStar Holdings.
Diversification Opportunities for Farmers Edge and ProStar Holdings
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Farmers and ProStar is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Farmers Edge and ProStar Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProStar Holdings and Farmers Edge 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 Farmers Edge are associated (or correlated) with ProStar Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProStar Holdings has no effect on the direction of Farmers Edge i.e., Farmers Edge and ProStar Holdings go up and down completely randomly.
Pair Corralation between Farmers Edge and ProStar Holdings
If you would invest 14.00 in Farmers Edge on September 1, 2024 and sell it today you would earn a total of 0.00 from holding Farmers Edge or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 4.55% |
| Values | Daily Returns |
Farmers Edge vs. ProStar Holdings
Performance |
| Timeline |
| Farmers Edge |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| ProStar Holdings |
Farmers Edge and ProStar Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Farmers Edge and ProStar Holdings
The main advantage of trading using opposite Farmers Edge and ProStar Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Farmers Edge position performs unexpectedly, ProStar Holdings 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 ProStar Holdings will offset losses from the drop in ProStar Holdings' long position.| Farmers Edge vs. RenoWorks Software | Farmers Edge vs. 01 Communique Laboratory | Farmers Edge vs. RESAAS Services | Farmers Edge vs. LifeSpeak |
| ProStar Holdings vs. 01 Communique Laboratory | ProStar Holdings vs. LifeSpeak | ProStar Holdings vs. RESAAS Services | ProStar Holdings vs. RenoWorks Software |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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