Correlation Between Farm Pride and GDI Property
Can any of the company-specific risk be diversified away by investing in both Farm Pride and GDI Property 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 GDI Property 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 GDI Property Group, you can compare the effects of market volatilities on Farm Pride and GDI Property 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 GDI Property. Check out your portfolio center. Please also check ongoing floating volatility patterns of Farm Pride and GDI Property.
Diversification Opportunities for Farm Pride and GDI Property
-0.49 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Farm and GDI is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Farm Pride Foods and GDI Property Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GDI Property Group 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 GDI Property. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GDI Property Group has no effect on the direction of Farm Pride i.e., Farm Pride and GDI Property go up and down completely randomly.
Pair Corralation between Farm Pride and GDI Property
Assuming the 90 days trading horizon Farm Pride Foods is expected to generate 2.76 times more return on investment than GDI Property. However, Farm Pride is 2.76 times more volatile than GDI Property Group. It trades about 0.02 of its potential returns per unit of risk. GDI Property Group is currently generating about 0.0 per unit of risk. If you would invest 14.00 in Farm Pride Foods on September 12, 2024 and sell it today you would lose (2.00) from holding Farm Pride Foods or give up 14.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Farm Pride Foods vs. GDI Property Group
Performance |
| Timeline |
| Farm Pride Foods |
| GDI Property Group |
Farm Pride and GDI Property Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Farm Pride and GDI Property
The main advantage of trading using opposite Farm Pride and GDI Property positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Farm Pride position performs unexpectedly, GDI Property 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 GDI Property will offset losses from the drop in GDI Property's long position.| Farm Pride vs. Medibank Private | Farm Pride vs. Kkr Credit Income | Farm Pride vs. Aurelia Metals | Farm Pride vs. Centuria Industrial Reit |
| GDI Property vs. Beston Global Food | GDI Property vs. Farm Pride Foods | GDI Property vs. Ainsworth Game Technology | GDI Property vs. Chalice Mining Limited |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
Other Complementary Tools
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios |