Correlation Between Lowland Investment and Premier Foods
Can any of the company-specific risk be diversified away by investing in both Lowland Investment and Premier Foods 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 Lowland Investment and Premier Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lowland Investment Co and Premier Foods PLC, you can compare the effects of market volatilities on Lowland Investment and Premier Foods 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 Lowland Investment with a short position of Premier Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lowland Investment and Premier Foods.
Diversification Opportunities for Lowland Investment and Premier Foods
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lowland and Premier is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Lowland Investment Co and Premier Foods PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Premier Foods PLC and Lowland Investment 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 Lowland Investment Co are associated (or correlated) with Premier Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Premier Foods PLC has no effect on the direction of Lowland Investment i.e., Lowland Investment and Premier Foods go up and down completely randomly.
Pair Corralation between Lowland Investment and Premier Foods
Assuming the 90 days trading horizon Lowland Investment Co is expected to generate 0.64 times more return on investment than Premier Foods. However, Lowland Investment Co is 1.56 times less risky than Premier Foods. It trades about 0.22 of its potential returns per unit of risk. Premier Foods PLC is currently generating about 0.03 per unit of risk. If you would invest 12,200 in Lowland Investment Co on September 14, 2024 and sell it today you would earn a total of 550.00 from holding Lowland Investment Co or generate 4.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lowland Investment Co vs. Premier Foods PLC
Performance |
| Timeline |
| Lowland Investment |
| Premier Foods PLC |
Lowland Investment and Premier Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lowland Investment and Premier Foods
The main advantage of trading using opposite Lowland Investment and Premier Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lowland Investment position performs unexpectedly, Premier Foods 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 Foods will offset losses from the drop in Premier Foods' long position.| Lowland Investment vs. Catalyst Media Group | Lowland Investment vs. CATLIN GROUP | Lowland Investment vs. Tamburi Investment Partners | Lowland Investment vs. Magnora ASA |
| Premier Foods vs. Samsung Electronics Co | Premier Foods vs. Samsung Electronics Co | Premier Foods vs. Hyundai Motor | Premier Foods vs. Toyota Motor 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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