Correlation Between AP Mller and Farmers

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both AP Mller and Farmers 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 AP Mller and Farmers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AP Mller and Farmers And Merchants, you can compare the effects of market volatilities on AP Mller and Farmers 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 AP Mller with a short position of Farmers. Check out your portfolio center. Please also check ongoing floating volatility patterns of AP Mller and Farmers.

Diversification Opportunities for AP Mller and Farmers

0.89
  Correlation Coefficient

Very poor diversification

The 3 months correlation between AMKBF and Farmers is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding AP Mller - and Farmers And Merchants in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Farmers And Merchants and AP Mller 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 AP Mller are associated (or correlated) with Farmers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Farmers And Merchants has no effect on the direction of AP Mller i.e., AP Mller and Farmers go up and down completely randomly.

Pair Corralation between AP Mller and Farmers

Assuming the 90 days horizon AP Mller is expected to under-perform the Farmers. In addition to that, AP Mller is 3.02 times more volatile than Farmers And Merchants. It trades about -0.01 of its total potential returns per unit of risk. Farmers And Merchants is currently generating about 0.01 per unit of volatility. If you would invest  475,286  in Farmers And Merchants on December 29, 2023 and sell it today you would earn a total of  4,714  from holding Farmers And Merchants or generate 0.99% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy100.0%
ValuesDaily Returns

AP Mller -  vs.  Farmers And Merchants

 Performance 
       Timeline  
AP Mller - 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days AP Mller has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's fundamental drivers remain nearly stable which may send shares a bit higher in April 2024. The current disturbance may also be a sign of long-run up-swing for the company stockholders.
Farmers And Merchants 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days Farmers And Merchants has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent fundamental drivers, Farmers is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

AP Mller and Farmers Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with AP Mller and Farmers

The main advantage of trading using opposite AP Mller and Farmers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AP Mller position performs unexpectedly, Farmers 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 Farmers will offset losses from the drop in Farmers' long position.
The idea behind AP Mller and Farmers And Merchants 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.
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.

Other Complementary Tools

Correlation Analysis
Reduce portfolio risk simply by holding instruments which are not perfectly correlated
Crypto Correlations
Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins
My Watchlist Analysis
Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like
AI Portfolio Architect
Use AI to generate optimal portfolios and find profitable investment opportunities
Watchlist Optimization
Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm
Portfolio Center
All portfolio management and optimization tools to improve performance of your portfolios
CEOs Directory
Screen CEOs from public companies around the world
Price Exposure Probability
Analyze equity upside and downside potential for a given time horizon across multiple markets