Correlation Between ProStar Holdings and Farmers Edge
Can any of the company-specific risk be diversified away by investing in both ProStar Holdings and Farmers Edge 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 ProStar Holdings and Farmers Edge into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ProStar Holdings and Farmers Edge, you can compare the effects of market volatilities on ProStar Holdings and Farmers Edge 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 ProStar Holdings with a short position of Farmers Edge. Check out your portfolio center. Please also check ongoing floating volatility patterns of ProStar Holdings and Farmers Edge.
Diversification Opportunities for ProStar Holdings and Farmers Edge
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between ProStar and Farmers is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding ProStar Holdings and Farmers Edge in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Farmers Edge and ProStar Holdings 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 ProStar Holdings are associated (or correlated) with Farmers Edge. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Farmers Edge has no effect on the direction of ProStar Holdings i.e., ProStar Holdings and Farmers Edge go up and down completely randomly.
Pair Corralation between ProStar Holdings and Farmers Edge
If you would invest 14.00 in Farmers Edge on September 1, 2024 and sell it today you would earn a total of 0.00 from holding Farmers Edge or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 4.55% |
| Values | Daily Returns |
ProStar Holdings vs. Farmers Edge
Performance |
| Timeline |
| ProStar Holdings |
| Farmers Edge |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
ProStar Holdings and Farmers Edge Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ProStar Holdings and Farmers Edge
The main advantage of trading using opposite ProStar Holdings and Farmers Edge positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ProStar Holdings position performs unexpectedly, Farmers Edge 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 Farmers Edge will offset losses from the drop in Farmers Edge's long position.| ProStar Holdings vs. 01 Communique Laboratory | ProStar Holdings vs. LifeSpeak | ProStar Holdings vs. RESAAS Services | ProStar Holdings vs. RenoWorks Software |
| Farmers Edge vs. RenoWorks Software | Farmers Edge vs. 01 Communique Laboratory | Farmers Edge vs. RESAAS Services | Farmers Edge vs. LifeSpeak |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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