Correlation Between Firetrade Engineering and Premier Marketing
Can any of the company-specific risk be diversified away by investing in both Firetrade Engineering and Premier Marketing 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 Firetrade Engineering and Premier Marketing into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Firetrade Engineering Public and Premier Marketing Public, you can compare the effects of market volatilities on Firetrade Engineering and Premier Marketing 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 Firetrade Engineering with a short position of Premier Marketing. Check out your portfolio center. Please also check ongoing floating volatility patterns of Firetrade Engineering and Premier Marketing.
Diversification Opportunities for Firetrade Engineering and Premier Marketing
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Firetrade and Premier is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Firetrade Engineering Public and Premier Marketing Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Premier Marketing Public and Firetrade Engineering 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 Firetrade Engineering Public are associated (or correlated) with Premier Marketing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Premier Marketing Public has no effect on the direction of Firetrade Engineering i.e., Firetrade Engineering and Premier Marketing go up and down completely randomly.
Pair Corralation between Firetrade Engineering and Premier Marketing
Assuming the 90 days trading horizon Firetrade Engineering Public is expected to generate 1.38 times more return on investment than Premier Marketing. However, Firetrade Engineering is 1.38 times more volatile than Premier Marketing Public. It trades about 0.22 of its potential returns per unit of risk. Premier Marketing Public is currently generating about -0.24 per unit of risk. If you would invest 145.00 in Firetrade Engineering Public on September 14, 2024 and sell it today you would earn a total of 8.00 from holding Firetrade Engineering Public or generate 5.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Firetrade Engineering Public vs. Premier Marketing Public
Performance |
| Timeline |
| Firetrade Engineering |
| Premier Marketing Public |
Firetrade Engineering and Premier Marketing Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Firetrade Engineering and Premier Marketing
The main advantage of trading using opposite Firetrade Engineering and Premier Marketing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Firetrade Engineering position performs unexpectedly, Premier Marketing 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 Marketing will offset losses from the drop in Premier Marketing's long position.| Firetrade Engineering vs. Tata Steel Public | Firetrade Engineering vs. TTCL Public | Firetrade Engineering vs. Thaifoods Group Public | Firetrade Engineering vs. TMT Steel Public |
| Premier Marketing vs. Haad Thip Public | Premier Marketing vs. MK Restaurant Group | Premier Marketing vs. Thai Union Group | Premier Marketing vs. Taokaenoi Food Marketing |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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