Correlation Between Star Media and Farm Price
Can any of the company-specific risk be diversified away by investing in both Star Media and Farm Price 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 Star Media and Farm Price into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Star Media Group and Farm Price Holdings, you can compare the effects of market volatilities on Star Media and Farm Price 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 Star Media with a short position of Farm Price. Check out your portfolio center. Please also check ongoing floating volatility patterns of Star Media and Farm Price.
Diversification Opportunities for Star Media and Farm Price
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Star and Farm is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Star Media Group and Farm Price Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Farm Price Holdings and Star Media 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 Star Media Group are associated (or correlated) with Farm Price. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Farm Price Holdings has no effect on the direction of Star Media i.e., Star Media and Farm Price go up and down completely randomly.
Pair Corralation between Star Media and Farm Price
Assuming the 90 days trading horizon Star Media Group is expected to under-perform the Farm Price. In addition to that, Star Media is 1.02 times more volatile than Farm Price Holdings. It trades about -0.05 of its total potential returns per unit of risk. Farm Price Holdings is currently generating about -0.02 per unit of volatility. If you would invest 55.00 in Farm Price Holdings on September 12, 2024 and sell it today you would lose (2.00) from holding Farm Price Holdings or give up 3.64% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Star Media Group vs. Farm Price Holdings
Performance |
Timeline |
Star Media Group |
Farm Price Holdings |
Star Media and Farm Price Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Star Media and Farm Price
The main advantage of trading using opposite Star Media and Farm Price positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Star Media position performs unexpectedly, Farm Price 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 Price will offset losses from the drop in Farm Price's long position.Star Media vs. Media Prima Bhd | Star Media vs. Asia Media Group | Star Media vs. Advance Information Marketing |
Farm Price vs. Malayan Banking Bhd | Farm Price vs. Public Bank Bhd | Farm Price vs. Petronas Chemicals Group | Farm Price vs. Tenaga Nasional Bhd |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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