Correlation Between Farm Pride and Carnegie Clean
Can any of the company-specific risk be diversified away by investing in both Farm Pride and Carnegie Clean 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 Pride and Carnegie Clean into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Farm Pride Foods and Carnegie Clean Energy, you can compare the effects of market volatilities on Farm Pride and Carnegie Clean 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 Pride with a short position of Carnegie Clean. Check out your portfolio center. Please also check ongoing floating volatility patterns of Farm Pride and Carnegie Clean.
Diversification Opportunities for Farm Pride and Carnegie Clean
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Farm and Carnegie is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Farm Pride Foods and Carnegie Clean Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carnegie Clean Energy and Farm Pride 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 Pride Foods are associated (or correlated) with Carnegie Clean. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carnegie Clean Energy has no effect on the direction of Farm Pride i.e., Farm Pride and Carnegie Clean go up and down completely randomly.
Pair Corralation between Farm Pride and Carnegie Clean
Assuming the 90 days trading horizon Farm Pride Foods is expected to under-perform the Carnegie Clean. In addition to that, Farm Pride is 1.43 times more volatile than Carnegie Clean Energy. It trades about -0.05 of its total potential returns per unit of risk. Carnegie Clean Energy is currently generating about -0.05 per unit of volatility. If you would invest 4.10 in Carnegie Clean Energy on September 13, 2024 and sell it today you would lose (0.20) from holding Carnegie Clean Energy or give up 4.88% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Farm Pride Foods vs. Carnegie Clean Energy
Performance |
| Timeline |
| Farm Pride Foods |
| Carnegie Clean Energy |
Farm Pride and Carnegie Clean Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Farm Pride and Carnegie Clean
The main advantage of trading using opposite Farm Pride and Carnegie Clean positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Farm Pride position performs unexpectedly, Carnegie Clean 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 Carnegie Clean will offset losses from the drop in Carnegie Clean's long position.| Farm Pride vs. Aneka Tambang Tbk | Farm Pride vs. Macquarie Group | Farm Pride vs. Macquarie Group Ltd | Farm Pride vs. Challenger |
| Carnegie Clean vs. Macquarie Group | Carnegie Clean vs. Rio Tinto | Carnegie Clean vs. CSL | Carnegie Clean vs. Commonwealth Bank of |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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