Correlation Between Natural Health and Farfetch
Can any of the company-specific risk be diversified away by investing in both Natural Health and Farfetch 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 Natural Health and Farfetch into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Natural Health Trend and Farfetch Ltd Class, you can compare the effects of market volatilities on Natural Health and Farfetch 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 Natural Health with a short position of Farfetch. Check out your portfolio center. Please also check ongoing floating volatility patterns of Natural Health and Farfetch.
Diversification Opportunities for Natural Health and Farfetch
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Natural and Farfetch is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Natural Health Trend and Farfetch Ltd Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Farfetch Class and Natural Health 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 Natural Health Trend are associated (or correlated) with Farfetch. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Farfetch Class has no effect on the direction of Natural Health i.e., Natural Health and Farfetch go up and down completely randomly.
Pair Corralation between Natural Health and Farfetch
If you would invest 464.00 in Natural Health Trend on November 9, 2024 and sell it today you would earn a total of 57.00 from holding Natural Health Trend or generate 12.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Natural Health Trend vs. Farfetch Ltd Class
Performance |
| Timeline |
| Natural Health Trend |
| Farfetch Class |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
Natural Health and Farfetch Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Natural Health and Farfetch
The main advantage of trading using opposite Natural Health and Farfetch positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Natural Health position performs unexpectedly, Farfetch 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 Farfetch will offset losses from the drop in Farfetch's long position.| Natural Health vs. Liquidity Services | Natural Health vs. Hour Loop | Natural Health vs. Qurate Retail Series | Natural Health vs. Emerge Commerce |
| Farfetch vs. JD Inc Adr | Farfetch vs. Alibaba Group Holding | Farfetch vs. Sea | Farfetch vs. Vipshop Holdings 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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