Correlation Between Global Net and Premier Foods
Can any of the company-specific risk be diversified away by investing in both Global Net and Premier Foods 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 Global Net and Premier Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global Net Lease and Premier Foods PLC, you can compare the effects of market volatilities on Global Net and Premier Foods 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 Global Net with a short position of Premier Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Net and Premier Foods.
Diversification Opportunities for Global Net and Premier Foods
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Global and Premier is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Global Net Lease and Premier Foods PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Premier Foods PLC and Global Net 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 Global Net Lease are associated (or correlated) with Premier Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Premier Foods PLC has no effect on the direction of Global Net i.e., Global Net and Premier Foods go up and down completely randomly.
Pair Corralation between Global Net and Premier Foods
Assuming the 90 days trading horizon Global Net is expected to generate 1.43 times less return on investment than Premier Foods. In addition to that, Global Net is 4.27 times more volatile than Premier Foods PLC. It trades about 0.01 of its total potential returns per unit of risk. Premier Foods PLC is currently generating about 0.08 per unit of volatility. If you would invest 10,920 in Premier Foods PLC on October 26, 2024 and sell it today you would earn a total of 7,440 from holding Premier Foods PLC or generate 68.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 98.19% |
| Values | Daily Returns |
Global Net Lease vs. Premier Foods PLC
Performance |
| Timeline |
| Global Net Lease |
| Premier Foods PLC |
Global Net and Premier Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Net and Premier Foods
The main advantage of trading using opposite Global Net and Premier Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Net position performs unexpectedly, Premier Foods 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 Premier Foods will offset losses from the drop in Premier Foods' long position.| Global Net vs. MTI Wireless Edge | Global Net vs. Sparebank 1 SR | Global Net vs. Erste Group Bank | Global Net vs. Cembra Money Bank |
| Premier Foods vs. Gamma Communications PLC | Premier Foods vs. Bell Food Group | Premier Foods vs. Aeorema Communications Plc | Premier Foods vs. Dairy Farm International |
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.
Other Complementary Tools
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account |