Correlation Between Silver Ridge and FARM FRESH
Can any of the company-specific risk be diversified away by investing in both Silver Ridge and FARM FRESH 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 Silver Ridge and FARM FRESH into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Silver Ridge Holdings and FARM FRESH BERHAD, you can compare the effects of market volatilities on Silver Ridge and FARM FRESH 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 Silver Ridge with a short position of FARM FRESH. Check out your portfolio center. Please also check ongoing floating volatility patterns of Silver Ridge and FARM FRESH.
Diversification Opportunities for Silver Ridge and FARM FRESH
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Silver and FARM is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Silver Ridge Holdings and FARM FRESH BERHAD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FARM FRESH BERHAD and Silver Ridge 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 Silver Ridge Holdings are associated (or correlated) with FARM FRESH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FARM FRESH BERHAD has no effect on the direction of Silver Ridge i.e., Silver Ridge and FARM FRESH go up and down completely randomly.
Pair Corralation between Silver Ridge and FARM FRESH
Assuming the 90 days trading horizon Silver Ridge Holdings is expected to generate 3.65 times more return on investment than FARM FRESH. However, Silver Ridge is 3.65 times more volatile than FARM FRESH BERHAD. It trades about 0.0 of its potential returns per unit of risk. FARM FRESH BERHAD is currently generating about -0.01 per unit of risk. If you would invest 47.00 in Silver Ridge Holdings on September 26, 2024 and sell it today you would lose (2.00) from holding Silver Ridge Holdings or give up 4.26% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Silver Ridge Holdings vs. FARM FRESH BERHAD
Performance |
Timeline |
Silver Ridge Holdings |
FARM FRESH BERHAD |
Silver Ridge and FARM FRESH Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Silver Ridge and FARM FRESH
The main advantage of trading using opposite Silver Ridge and FARM FRESH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Silver Ridge position performs unexpectedly, FARM FRESH 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 FARM FRESH will offset losses from the drop in FARM FRESH's long position.Silver Ridge vs. Malayan Banking Bhd | Silver Ridge vs. Public Bank Bhd | Silver Ridge vs. Petronas Chemicals Group | Silver Ridge vs. Tenaga Nasional Bhd |
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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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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