Correlation Between Collins Foods and Premier Investments
Can any of the company-specific risk be diversified away by investing in both Collins Foods 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 Collins Foods and Premier Investments into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Collins Foods and Premier Investments, you can compare the effects of market volatilities on Collins Foods 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 Collins Foods with a short position of Premier Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Collins Foods and Premier Investments.
Diversification Opportunities for Collins Foods and Premier Investments
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Collins and Premier is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Collins Foods and Premier Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Premier Investments and Collins Foods 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 Collins Foods 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 Collins Foods i.e., Collins Foods and Premier Investments go up and down completely randomly.
Pair Corralation between Collins Foods and Premier Investments
Assuming the 90 days trading horizon Collins Foods is expected to generate 1.81 times less return on investment than Premier Investments. In addition to that, Collins Foods is 1.11 times more volatile than Premier Investments. It trades about 0.03 of its total potential returns per unit of risk. Premier Investments is currently generating about 0.06 per unit of volatility. If you would invest 2,321 in Premier Investments on September 3, 2024 and sell it today you would earn a total of 1,148 from holding Premier Investments or generate 49.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Collins Foods vs. Premier Investments
Performance |
| Timeline |
| Collins Foods |
| Premier Investments |
Collins Foods and Premier Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Collins Foods and Premier Investments
The main advantage of trading using opposite Collins Foods and Premier Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Collins Foods 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.| Collins Foods vs. Westpac Banking | Collins Foods vs. Champion Iron | Collins Foods vs. iShares Global Healthcare | Collins Foods vs. Peel Mining |
| Premier Investments vs. Westpac Banking | Premier Investments vs. Champion Iron | Premier Investments vs. iShares Global Healthcare | Premier Investments vs. Peel Mining |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
Other Complementary Tools
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges |