Correlation Between Farmers Edge and RESAAS Services

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

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

Diversification Opportunities for Farmers Edge and RESAAS Services

0.0

Correlation Coefficient

Farmers Edge  RESAAS Services

Pay attention - limited upside

The 3 months correlation between Farmers and RESAAS is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Farmers Edge and RESAAS Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RESAAS Services and Farmers Edge 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 Farmers Edge are associated (or correlated) with RESAAS Services. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RESAAS Services has no effect on the direction of Farmers Edge i.e., Farmers Edge and RESAAS Services go up and down completely randomly.

Pair Corralation between Farmers Edge and RESAAS Services

If you would invest  17.00  in RESAAS Services on December 30, 2024 and sell it today you would earn a total of  14.00  from holding RESAAS Services or generate 82.35% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Farmers Edge  vs.  RESAAS Services

Farmers Edge

Risk-Adjusted Performance

Very Weak

Over the last 90 days Farmers Edge has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable technical and fundamental indicators, Farmers Edge is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

RESAAS Services

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in RESAAS Services are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, RESAAS Services reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Farmers Edge and RESAAS Services

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

The idea behind Farmers Edge and RESAAS Services 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..