Correlation Between Tejon Ranch and Farmers
Can any of the company-specific risk be diversified away by investing in both Tejon Ranch and Farmers 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 Tejon Ranch and Farmers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tejon Ranch Co and Farmers And Merchants, you can compare the effects of market volatilities on Tejon Ranch and Farmers 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 Tejon Ranch with a short position of Farmers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tejon Ranch and Farmers.
Diversification Opportunities for Tejon Ranch and Farmers
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Tejon and Farmers is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Tejon Ranch Co and Farmers And Merchants in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Farmers And Merchants and Tejon Ranch 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 Tejon Ranch Co are associated (or correlated) with Farmers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Farmers And Merchants has no effect on the direction of Tejon Ranch i.e., Tejon Ranch and Farmers go up and down completely randomly.
Pair Corralation between Tejon Ranch and Farmers
Considering the 90-day investment horizon Tejon Ranch Co is expected to generate 1.06 times more return on investment than Farmers. However, Tejon Ranch is 1.06 times more volatile than Farmers And Merchants. It trades about -0.01 of its potential returns per unit of risk. Farmers And Merchants is currently generating about -0.02 per unit of risk. If you would invest 1,896 in Tejon Ranch Co on August 29, 2024 and sell it today you would lose (286.00) from holding Tejon Ranch Co or give up 15.08% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 98.99% |
| Values | Daily Returns |
Tejon Ranch Co vs. Farmers And Merchants
Performance |
| Timeline |
| Tejon Ranch |
| Farmers And Merchants |
Tejon Ranch and Farmers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tejon Ranch and Farmers
The main advantage of trading using opposite Tejon Ranch and Farmers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tejon Ranch position performs unexpectedly, Farmers 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 will offset losses from the drop in Farmers' long position.| Tejon Ranch vs. Steel Partners Holdings | Tejon Ranch vs. Compass Diversified | Tejon Ranch vs. Brookfield Business Partners | Tejon Ranch vs. Matthews International |
| Farmers vs. First National Bank | Farmers vs. Farmers Merchants Bancorp | Farmers vs. Exchange Bank | Farmers vs. First National of |
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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