Correlation Between Farmhouse and Tinybeans Group

Can any of the company-specific risk be diversified away by investing in both Farmhouse and Tinybeans Group 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 Farmhouse and Tinybeans Group into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Farmhouse and Tinybeans Group Limited, you can compare the effects of market volatilities on Farmhouse and Tinybeans Group 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 Farmhouse with a short position of Tinybeans Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Farmhouse and Tinybeans Group.

Diversification Opportunities for Farmhouse and Tinybeans Group

0.12

Correlation Coefficient

Farmhouse  Tinybeans Group

Average diversification

The 3 months correlation between Farmhouse and Tinybeans is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Farmhouse and Tinybeans Group Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tinybeans Group and Farmhouse 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 Farmhouse are associated (or correlated) with Tinybeans Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tinybeans Group has no effect on the direction of Farmhouse i.e., Farmhouse and Tinybeans Group go up and down completely randomly.

Pair Corralation between Farmhouse and Tinybeans Group

If you would invest  0.50  in Tinybeans Group Limited on September 22, 2024 and sell it today you would earn a total of  0.00  from holding Tinybeans Group Limited or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	91.3%
Values	Daily Returns

Farmhouse  vs.  Tinybeans Group Limited

Farmhouse

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Farmhouse has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's technical indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Tinybeans Group

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Tinybeans Group Limited are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Tinybeans Group reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Farmhouse and Tinybeans Group

The main advantage of trading using opposite Farmhouse and Tinybeans Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Farmhouse position performs unexpectedly, Tinybeans Group 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 Tinybeans Group will offset losses from the drop in Tinybeans Group's long position.

The idea behind Farmhouse and Tinybeans Group Limited pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Global Correlations module to find global opportunities by holding instruments from different markets.