Correlation Between Alternative Investment and Premier Investments
Can any of the company-specific risk be diversified away by investing in both Alternative Investment and Premier Investments 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 Alternative Investment and Premier Investments into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Alternative Investment Trust and Premier Investments, you can compare the effects of market volatilities on Alternative Investment and Premier Investments 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 Alternative Investment with a short position of Premier Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alternative Investment and Premier Investments.
Diversification Opportunities for Alternative Investment and Premier Investments
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Alternative and Premier is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Alternative Investment Trust and Premier Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Premier Investments and Alternative Investment 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 Alternative Investment Trust are associated (or correlated) with Premier Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Premier Investments has no effect on the direction of Alternative Investment i.e., Alternative Investment and Premier Investments go up and down completely randomly.
Pair Corralation between Alternative Investment and Premier Investments
Assuming the 90 days trading horizon Alternative Investment Trust is expected to generate 1.08 times more return on investment than Premier Investments. However, Alternative Investment is 1.08 times more volatile than Premier Investments. It trades about 0.06 of its potential returns per unit of risk. Premier Investments is currently generating about 0.06 per unit of risk. If you would invest 88.00 in Alternative Investment Trust on September 2, 2024 and sell it today you would earn a total of 56.00 from holding Alternative Investment Trust or generate 63.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Alternative Investment Trust vs. Premier Investments
Performance |
| Timeline |
| Alternative Investment |
| Premier Investments |
Alternative Investment and Premier Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Alternative Investment and Premier Investments
The main advantage of trading using opposite Alternative Investment and Premier Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Alternative Investment position performs unexpectedly, Premier Investments 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 Investments will offset losses from the drop in Premier Investments' long position.| Alternative Investment vs. WA1 Resources | Alternative Investment vs. Predictive Discovery | Alternative Investment vs. Cooper Metals | Alternative Investment vs. OD6 Metals |
| Premier Investments vs. Aneka Tambang Tbk | Premier Investments vs. BHP Group Limited | Premier Investments vs. Rio Tinto | Premier Investments vs. Macquarie Group Ltd |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
Other Complementary Tools
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets |