Correlation Between Atresmedia and Premier Foods
Can any of the company-specific risk be diversified away by investing in both Atresmedia 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 Atresmedia and Premier Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Atresmedia and Premier Foods PLC, you can compare the effects of market volatilities on Atresmedia 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 Atresmedia with a short position of Premier Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Atresmedia and Premier Foods.
Diversification Opportunities for Atresmedia and Premier Foods
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Atresmedia and Premier is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Atresmedia 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 Atresmedia 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 Atresmedia 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 Atresmedia i.e., Atresmedia and Premier Foods go up and down completely randomly.
Pair Corralation between Atresmedia and Premier Foods
Assuming the 90 days trading horizon Atresmedia is expected to generate 1.46 times more return on investment than Premier Foods. However, Atresmedia is 1.46 times more volatile than Premier Foods PLC. It trades about -0.05 of its potential returns per unit of risk. Premier Foods PLC is currently generating about -0.07 per unit of risk. If you would invest 453.00 in Atresmedia on October 11, 2024 and sell it today you would lose (7.00) from holding Atresmedia or give up 1.55% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Atresmedia vs. Premier Foods PLC
Performance |
| Timeline |
| Atresmedia |
| Premier Foods PLC |
Atresmedia and Premier Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Atresmedia and Premier Foods
The main advantage of trading using opposite Atresmedia and Premier Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Atresmedia 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.| Atresmedia vs. Sligro Food Group | Atresmedia vs. Ashtead Technology Holdings | Atresmedia vs. Allianz Technology Trust | Atresmedia vs. Celebrus Technologies plc |
| Premier Foods vs. Global Net Lease | Premier Foods vs. URU Metals | Premier Foods vs. First Class Metals | Premier Foods vs. Air Products Chemicals |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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