Correlation Between Camellia Plc and Premier Foods
Can any of the company-specific risk be diversified away by investing in both Camellia Plc 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 Camellia Plc and Premier Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Camellia Plc and Premier Foods PLC, you can compare the effects of market volatilities on Camellia Plc 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 Camellia Plc with a short position of Premier Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Camellia Plc and Premier Foods.
Diversification Opportunities for Camellia Plc and Premier Foods
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Camellia and Premier is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Camellia Plc 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 Camellia Plc 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 Camellia Plc 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 Camellia Plc i.e., Camellia Plc and Premier Foods go up and down completely randomly.
Pair Corralation between Camellia Plc and Premier Foods
Assuming the 90 days trading horizon Camellia Plc is expected to under-perform the Premier Foods. But the stock apears to be less risky and, when comparing its historical volatility, Camellia Plc is 1.78 times less risky than Premier Foods. The stock trades about -0.04 of its potential returns per unit of risk. The Premier Foods PLC is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 18,880 in Premier Foods PLC on September 3, 2024 and sell it today you would earn a total of 680.00 from holding Premier Foods PLC or generate 3.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Camellia Plc vs. Premier Foods PLC
Performance |
| Timeline |
| Camellia Plc |
| Premier Foods PLC |
Camellia Plc and Premier Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Camellia Plc and Premier Foods
The main advantage of trading using opposite Camellia Plc and Premier Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Camellia Plc 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.| Camellia Plc vs. Pets at Home | Camellia Plc vs. SBM Offshore NV | Camellia Plc vs. Universal Music Group | Camellia Plc vs. Lindsell Train Investment |
| Premier Foods vs. National Atomic Co | Premier Foods vs. Flutter Entertainment PLC | Premier Foods vs. Camellia Plc | Premier Foods vs. Marwyn Value Investors |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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