Correlation Between Crown Asia and Prime Media
Can any of the company-specific risk be diversified away by investing in both Crown Asia and Prime 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 Crown Asia and Prime Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Crown Asia Chemicals and Prime Media Holdings, you can compare the effects of market volatilities on Crown Asia and Prime 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 Crown Asia with a short position of Prime Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Crown Asia and Prime Media.
Diversification Opportunities for Crown Asia and Prime Media
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Crown and Prime is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Crown Asia Chemicals and Prime Media Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prime Media Holdings and Crown Asia 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 Crown Asia Chemicals are associated (or correlated) with Prime Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prime Media Holdings has no effect on the direction of Crown Asia i.e., Crown Asia and Prime Media go up and down completely randomly.
Pair Corralation between Crown Asia and Prime Media
Assuming the 90 days trading horizon Crown Asia Chemicals is expected to generate 0.6 times more return on investment than Prime Media. However, Crown Asia Chemicals is 1.67 times less risky than Prime Media. It trades about -0.1 of its potential returns per unit of risk. Prime Media Holdings is currently generating about -0.29 per unit of risk. If you would invest 189.00 in Crown Asia Chemicals on August 31, 2024 and sell it today you would lose (9.00) from holding Crown Asia Chemicals or give up 4.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Crown Asia Chemicals vs. Prime Media Holdings
Performance |
| Timeline |
| Crown Asia Chemicals |
| Prime Media Holdings |
Crown Asia and Prime Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Crown Asia and Prime Media
The main advantage of trading using opposite Crown Asia and Prime Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Crown Asia position performs unexpectedly, Prime 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 Prime Media will offset losses from the drop in Prime Media's long position.| Crown Asia vs. Figaro Coffee Group | Crown Asia vs. Robinsons Retail Holdings | Crown Asia vs. Manila Mining Corp | Crown Asia vs. Metro Retail Stores |
| Prime Media vs. GT Capital Holdings | Prime Media vs. Allhome Corp | Prime Media vs. Jollibee Foods Corp | Prime Media vs. LFM Properties Corp |
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.
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