Correlation Between Farm Pride and OOhMedia
Can any of the company-specific risk be diversified away by investing in both Farm Pride and OOhMedia 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 OOhMedia 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 oOhMedia, you can compare the effects of market volatilities on Farm Pride and OOhMedia 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 OOhMedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Farm Pride and OOhMedia.
Diversification Opportunities for Farm Pride and OOhMedia
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Farm and OOhMedia is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Farm Pride Foods and oOhMedia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on oOhMedia 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 OOhMedia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of oOhMedia has no effect on the direction of Farm Pride i.e., Farm Pride and OOhMedia go up and down completely randomly.
Pair Corralation between Farm Pride and OOhMedia
Assuming the 90 days trading horizon Farm Pride Foods is expected to generate 3.98 times more return on investment than OOhMedia. However, Farm Pride is 3.98 times more volatile than oOhMedia. It trades about 0.15 of its potential returns per unit of risk. oOhMedia is currently generating about 0.29 per unit of risk. If you would invest 12.00 in Farm Pride Foods on October 17, 2024 and sell it today you would earn a total of 2.00 from holding Farm Pride Foods or generate 16.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Farm Pride Foods vs. oOhMedia
Performance |
| Timeline |
| Farm Pride Foods |
| oOhMedia |
Farm Pride and OOhMedia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Farm Pride and OOhMedia
The main advantage of trading using opposite Farm Pride and OOhMedia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Farm Pride position performs unexpectedly, OOhMedia 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 OOhMedia will offset losses from the drop in OOhMedia's long position.| Farm Pride vs. Embark Education Group | Farm Pride vs. Pure Foods Tasmania | Farm Pride vs. Kip McGrath Education | Farm Pride vs. Air New Zealand |
| OOhMedia vs. Hutchison Telecommunications | OOhMedia vs. Insurance Australia Group | OOhMedia vs. Advanced Braking Technology | OOhMedia vs. Farm Pride Foods |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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