Correlation Between Prime Electronics and U Media
Can any of the company-specific risk be diversified away by investing in both Prime Electronics and U Media 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 Prime Electronics and U Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Prime Electronics Satellitics and U Media Communications, you can compare the effects of market volatilities on Prime Electronics and U Media 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 Prime Electronics with a short position of U Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prime Electronics and U Media.
Diversification Opportunities for Prime Electronics and U Media
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Prime and 6470 is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Prime Electronics Satellitics and U Media Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on U Media Communications and Prime Electronics 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 Prime Electronics Satellitics are associated (or correlated) with U Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of U Media Communications has no effect on the direction of Prime Electronics i.e., Prime Electronics and U Media go up and down completely randomly.
Pair Corralation between Prime Electronics and U Media
Assuming the 90 days trading horizon Prime Electronics Satellitics is expected to under-perform the U Media. But the stock apears to be less risky and, when comparing its historical volatility, Prime Electronics Satellitics is 2.12 times less risky than U Media. The stock trades about -0.53 of its potential returns per unit of risk. The U Media Communications is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 4,850 in U Media Communications on September 13, 2024 and sell it today you would earn a total of 540.00 from holding U Media Communications or generate 11.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Prime Electronics Satellitics vs. U Media Communications
Performance |
| Timeline |
| Prime Electronics |
| U Media Communications |
Prime Electronics and U Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Prime Electronics and U Media
The main advantage of trading using opposite Prime Electronics and U Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prime Electronics position performs unexpectedly, U Media 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 U Media will offset losses from the drop in U Media's long position.| Prime Electronics vs. Est Global Apparel | Prime Electronics vs. STL Technology Co | Prime Electronics vs. United Radiant Technology | Prime Electronics vs. Advanced Echem Materials |
| U Media vs. Hunya Foods Co | U Media vs. Cleanaway Co | U Media vs. Fu Burg Industrial | U Media vs. Coxon Precise Industrial |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
Other Complementary Tools
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. |