Correlation Between PREMIER FOODS and Uni President
Can any of the company-specific risk be diversified away by investing in both PREMIER FOODS and Uni President 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 PREMIER FOODS and Uni President into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PREMIER FOODS and Uni President China Holdings, you can compare the effects of market volatilities on PREMIER FOODS and Uni President 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 PREMIER FOODS with a short position of Uni President. Check out your portfolio center. Please also check ongoing floating volatility patterns of PREMIER FOODS and Uni President.
Diversification Opportunities for PREMIER FOODS and Uni President
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between PREMIER and Uni is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding PREMIER FOODS and Uni President China Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Uni President China and PREMIER 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 PREMIER FOODS are associated (or correlated) with Uni President. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Uni President China has no effect on the direction of PREMIER FOODS i.e., PREMIER FOODS and Uni President go up and down completely randomly.
Pair Corralation between PREMIER FOODS and Uni President
Assuming the 90 days trading horizon PREMIER FOODS is expected to generate 3.32 times less return on investment than Uni President. But when comparing it to its historical volatility, PREMIER FOODS is 7.12 times less risky than Uni President. It trades about 0.1 of its potential returns per unit of risk. Uni President China Holdings is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 48.00 in Uni President China Holdings on September 12, 2024 and sell it today you would earn a total of 31.00 from holding Uni President China Holdings or generate 64.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PREMIER FOODS vs. Uni President China Holdings
Performance |
| Timeline |
| PREMIER FOODS |
| Uni President China |
PREMIER FOODS and Uni President Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PREMIER FOODS and Uni President
The main advantage of trading using opposite PREMIER FOODS and Uni President positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PREMIER FOODS position performs unexpectedly, Uni President 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 Uni President will offset losses from the drop in Uni President's long position.| PREMIER FOODS vs. Japan Asia Investment | PREMIER FOODS vs. CapitaLand Investment Limited | PREMIER FOODS vs. SALESFORCE INC CDR | PREMIER FOODS vs. Apollo Investment Corp |
| Uni President vs. JJ SNACK FOODS | Uni President vs. Public Storage | Uni President vs. PREMIER FOODS | Uni President vs. Collins Foods Limited |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
Other Complementary Tools
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing |