Correlation Between Farm Pride and Regis Healthcare
Can any of the company-specific risk be diversified away by investing in both Farm Pride and Regis Healthcare 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 Regis Healthcare 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 Regis Healthcare, you can compare the effects of market volatilities on Farm Pride and Regis Healthcare 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 Regis Healthcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Farm Pride and Regis Healthcare.
Diversification Opportunities for Farm Pride and Regis Healthcare
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Farm and Regis is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Farm Pride Foods and Regis Healthcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Regis Healthcare 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 Regis Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Regis Healthcare has no effect on the direction of Farm Pride i.e., Farm Pride and Regis Healthcare go up and down completely randomly.
Pair Corralation between Farm Pride and Regis Healthcare
Assuming the 90 days trading horizon Farm Pride Foods is expected to generate 2.8 times more return on investment than Regis Healthcare. However, Farm Pride is 2.8 times more volatile than Regis Healthcare. It trades about 0.09 of its potential returns per unit of risk. Regis Healthcare is currently generating about 0.17 per unit of risk. If you would invest 13.00 in Farm Pride Foods on November 2, 2024 and sell it today you would earn a total of 1.00 from holding Farm Pride Foods or generate 7.69% 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. Regis Healthcare
Performance |
| Timeline |
| Farm Pride Foods |
| Regis Healthcare |
Farm Pride and Regis Healthcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Farm Pride and Regis Healthcare
The main advantage of trading using opposite Farm Pride and Regis Healthcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Farm Pride position performs unexpectedly, Regis Healthcare 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 Regis Healthcare will offset losses from the drop in Regis Healthcare's long position.| Farm Pride vs. Sequoia Financial Group | Farm Pride vs. Pure Foods Tasmania | Farm Pride vs. TPG Telecom | Farm Pride vs. Liberty Financial Group |
| Regis Healthcare vs. EVE Health Group | Regis Healthcare vs. Fisher Paykel Healthcare | Regis Healthcare vs. MetalsGrove Mining | Regis Healthcare vs. Vitura Health 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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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