Correlation Between FIRST SHIP and DAIRY FARM
Can any of the company-specific risk be diversified away by investing in both FIRST SHIP and DAIRY FARM 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 FIRST SHIP and DAIRY FARM into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FIRST SHIP LEASE and DAIRY FARM INTL, you can compare the effects of market volatilities on FIRST SHIP and DAIRY FARM 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 FIRST SHIP with a short position of DAIRY FARM. Check out your portfolio center. Please also check ongoing floating volatility patterns of FIRST SHIP and DAIRY FARM.
Diversification Opportunities for FIRST SHIP and DAIRY FARM
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between FIRST and DAIRY is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding FIRST SHIP LEASE and DAIRY FARM INTL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DAIRY FARM INTL and FIRST SHIP 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 FIRST SHIP LEASE are associated (or correlated) with DAIRY FARM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DAIRY FARM INTL has no effect on the direction of FIRST SHIP i.e., FIRST SHIP and DAIRY FARM go up and down completely randomly.
Pair Corralation between FIRST SHIP and DAIRY FARM
Assuming the 90 days horizon FIRST SHIP LEASE is expected to under-perform the DAIRY FARM. In addition to that, FIRST SHIP is 1.17 times more volatile than DAIRY FARM INTL. It trades about -0.06 of its total potential returns per unit of risk. DAIRY FARM INTL is currently generating about 0.01 per unit of volatility. If you would invest 220.00 in DAIRY FARM INTL on November 5, 2024 and sell it today you would earn a total of 0.00 from holding DAIRY FARM INTL or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
FIRST SHIP LEASE vs. DAIRY FARM INTL
Performance |
| Timeline |
| FIRST SHIP LEASE |
| DAIRY FARM INTL |
FIRST SHIP and DAIRY FARM Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FIRST SHIP and DAIRY FARM
The main advantage of trading using opposite FIRST SHIP and DAIRY FARM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FIRST SHIP position performs unexpectedly, DAIRY FARM 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 DAIRY FARM will offset losses from the drop in DAIRY FARM's long position.| FIRST SHIP vs. COSCO SHIPPING Holdings | FIRST SHIP vs. Hapag Lloyd AG | FIRST SHIP vs. Orient Overseas Limited | FIRST SHIP vs. Mitsui OSK Lines |
| DAIRY FARM vs. Salesforce | DAIRY FARM vs. National Retail Properties | DAIRY FARM vs. CANON MARKETING JP | DAIRY FARM vs. FAST RETAIL ADR |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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