Correlation Between Metro Retail and Premiere Entertainment
Can any of the company-specific risk be diversified away by investing in both Metro Retail and Premiere Entertainment 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 Metro Retail and Premiere Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Metro Retail Stores and Premiere Entertainment, you can compare the effects of market volatilities on Metro Retail and Premiere Entertainment 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 Metro Retail with a short position of Premiere Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Metro Retail and Premiere Entertainment.
Diversification Opportunities for Metro Retail and Premiere Entertainment
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Metro and Premiere is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Metro Retail Stores and Premiere Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Premiere Entertainment and Metro Retail 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 Metro Retail Stores are associated (or correlated) with Premiere Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Premiere Entertainment has no effect on the direction of Metro Retail i.e., Metro Retail and Premiere Entertainment go up and down completely randomly.
Pair Corralation between Metro Retail and Premiere Entertainment
Assuming the 90 days trading horizon Metro Retail Stores is expected to under-perform the Premiere Entertainment. But the stock apears to be less risky and, when comparing its historical volatility, Metro Retail Stores is 2.37 times less risky than Premiere Entertainment. The stock trades about -0.08 of its potential returns per unit of risk. The Premiere Entertainment is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 18.00 in Premiere Entertainment on August 29, 2024 and sell it today you would earn a total of 0.00 from holding Premiere Entertainment or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Metro Retail Stores vs. Premiere Entertainment
Performance |
| Timeline |
| Metro Retail Stores |
| Premiere Entertainment |
Metro Retail and Premiere Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Metro Retail and Premiere Entertainment
The main advantage of trading using opposite Metro Retail and Premiere Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Metro Retail position performs unexpectedly, Premiere Entertainment 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 Premiere Entertainment will offset losses from the drop in Premiere Entertainment's long position.| Metro Retail vs. Allhome Corp | Metro Retail vs. Jollibee Foods Corp | Metro Retail vs. LFM Properties Corp | Metro Retail vs. Altus Property Ventures |
| Premiere Entertainment vs. Apex Mining Co | Premiere Entertainment vs. Bank of the | Premiere Entertainment vs. Semirara Mining Corp | Premiere Entertainment vs. Union Bank of |
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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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