Correlation Between IFAN Financial and Plandai Biotech

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

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

Diversification Opportunities for IFAN Financial and Plandai Biotech

0.01

Correlation Coefficient

IFAN Financial  Plandai Biotech

Significant diversification

The 3 months correlation between IFAN and Plandai is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding IFAN Financial and Plandai Biotech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Plandai Biotech and IFAN Financial 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 IFAN Financial are associated (or correlated) with Plandai Biotech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Plandai Biotech has no effect on the direction of IFAN Financial i.e., IFAN Financial and Plandai Biotech go up and down completely randomly.

Pair Corralation between IFAN Financial and Plandai Biotech

Given the investment horizon of 90 days IFAN Financial is expected to generate 67.1 times less return on investment than Plandai Biotech. But when comparing it to its historical volatility, IFAN Financial is 10.23 times less risky than Plandai Biotech. It trades about 0.04 of its potential returns per unit of risk. Plandai Biotech is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest  0.01  in Plandai Biotech on December 28, 2024 and sell it today you would lose (0.01) from holding Plandai Biotech or give up 100.0% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.36%
Values	Daily Returns

IFAN Financial  vs.  Plandai Biotech

IFAN Financial

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in IFAN Financial are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady basic indicators, IFAN Financial displayed solid returns over the last few months and may actually be approaching a breakup point.

Plandai Biotech

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Plandai Biotech are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. Despite quite weak basic indicators, Plandai Biotech disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with IFAN Financial and Plandai Biotech

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

The idea behind IFAN Financial and Plandai Biotech 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.