Correlation Between Flagship Investments and Prime Financial
Can any of the company-specific risk be diversified away by investing in both Flagship Investments and Prime Financial 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 Flagship Investments and Prime Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Flagship Investments and Prime Financial Group, you can compare the effects of market volatilities on Flagship Investments and Prime Financial 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 Flagship Investments with a short position of Prime Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Flagship Investments and Prime Financial.
Diversification Opportunities for Flagship Investments and Prime Financial
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Flagship and Prime is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Flagship Investments and Prime Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prime Financial Group and Flagship Investments 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 Flagship Investments are associated (or correlated) with Prime Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prime Financial Group has no effect on the direction of Flagship Investments i.e., Flagship Investments and Prime Financial go up and down completely randomly.
Pair Corralation between Flagship Investments and Prime Financial
Assuming the 90 days trading horizon Flagship Investments is expected to generate 0.25 times more return on investment than Prime Financial. However, Flagship Investments is 3.96 times less risky than Prime Financial. It trades about 0.46 of its potential returns per unit of risk. Prime Financial Group is currently generating about 0.08 per unit of risk. If you would invest 203.00 in Flagship Investments on September 12, 2024 and sell it today you would earn a total of 17.00 from holding Flagship Investments or generate 8.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Flagship Investments vs. Prime Financial Group
Performance |
| Timeline |
| Flagship Investments |
| Prime Financial Group |
Flagship Investments and Prime Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Flagship Investments and Prime Financial
The main advantage of trading using opposite Flagship Investments and Prime Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Flagship Investments position performs unexpectedly, Prime Financial 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 Financial will offset losses from the drop in Prime Financial's long position.| Flagship Investments vs. MetalsGrove Mining | Flagship Investments vs. Perseus Mining | Flagship Investments vs. Retail Food Group | Flagship Investments vs. Infomedia |
| Prime Financial vs. REGAL ASIAN INVESTMENTS | Prime Financial vs. Perseus Mining | Prime Financial vs. Spirit Telecom | Prime Financial vs. Flagship Investments |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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