Correlation Between DAIRY FARM and CPU SOFTWAREHOUSE
Can any of the company-specific risk be diversified away by investing in both DAIRY FARM and CPU SOFTWAREHOUSE 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 DAIRY FARM and CPU SOFTWAREHOUSE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DAIRY FARM INTL and CPU SOFTWAREHOUSE, you can compare the effects of market volatilities on DAIRY FARM and CPU SOFTWAREHOUSE 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 DAIRY FARM with a short position of CPU SOFTWAREHOUSE. Check out your portfolio center. Please also check ongoing floating volatility patterns of DAIRY FARM and CPU SOFTWAREHOUSE.
Diversification Opportunities for DAIRY FARM and CPU SOFTWAREHOUSE
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between DAIRY and CPU is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding DAIRY FARM INTL and CPU SOFTWAREHOUSE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CPU SOFTWAREHOUSE and DAIRY FARM 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 DAIRY FARM INTL are associated (or correlated) with CPU SOFTWAREHOUSE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CPU SOFTWAREHOUSE has no effect on the direction of DAIRY FARM i.e., DAIRY FARM and CPU SOFTWAREHOUSE go up and down completely randomly.
Pair Corralation between DAIRY FARM and CPU SOFTWAREHOUSE
Assuming the 90 days trading horizon DAIRY FARM INTL is expected to under-perform the CPU SOFTWAREHOUSE. But the stock apears to be less risky and, when comparing its historical volatility, DAIRY FARM INTL is 3.7 times less risky than CPU SOFTWAREHOUSE. The stock trades about -0.01 of its potential returns per unit of risk. The CPU SOFTWAREHOUSE is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 89.00 in CPU SOFTWAREHOUSE on December 22, 2024 and sell it today you would earn a total of 19.00 from holding CPU SOFTWAREHOUSE or generate 21.35% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
DAIRY FARM INTL vs. CPU SOFTWAREHOUSE
Performance |
Timeline |
DAIRY FARM INTL |
CPU SOFTWAREHOUSE |
DAIRY FARM and CPU SOFTWAREHOUSE Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with DAIRY FARM and CPU SOFTWAREHOUSE
The main advantage of trading using opposite DAIRY FARM and CPU SOFTWAREHOUSE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DAIRY FARM position performs unexpectedly, CPU SOFTWAREHOUSE 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 CPU SOFTWAREHOUSE will offset losses from the drop in CPU SOFTWAREHOUSE's long position.DAIRY FARM vs. Singapore Telecommunications Limited | DAIRY FARM vs. Universal Health Realty | DAIRY FARM vs. CENTURIA OFFICE REIT | DAIRY FARM vs. Natural Health Trends |
CPU SOFTWAREHOUSE vs. ZINC MEDIA GR | CPU SOFTWAREHOUSE vs. GigaMedia | CPU SOFTWAREHOUSE vs. Fuji Media Holdings | CPU SOFTWAREHOUSE vs. Tencent Music Entertainment |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
Other Complementary Tools
Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
Commodity Directory Find actively traded commodities issued by global exchanges | |
Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios |