Correlation Between One Media and Premier Foods
Can any of the company-specific risk be diversified away by investing in both One Media 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 One Media and Premier Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between One Media iP and Premier Foods PLC, you can compare the effects of market volatilities on One Media 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 One Media with a short position of Premier Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of One Media and Premier Foods.
Diversification Opportunities for One Media and Premier Foods
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between One and Premier is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding One Media iP 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 One Media 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 One Media iP 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 One Media i.e., One Media and Premier Foods go up and down completely randomly.
Pair Corralation between One Media and Premier Foods
Assuming the 90 days trading horizon One Media iP is expected to generate 0.96 times more return on investment than Premier Foods. However, One Media iP is 1.04 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 0.04 per unit of risk. If you would invest 425.00 in One Media iP on November 7, 2024 and sell it today you would earn a total of 25.00 from holding One Media iP or generate 5.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
One Media iP vs. Premier Foods PLC
Performance |
| Timeline |
| One Media iP |
| Premier Foods PLC |
One Media and Premier Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with One Media and Premier Foods
The main advantage of trading using opposite One Media and Premier Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if One Media 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.| One Media vs. Software Circle plc | One Media vs. Ross Stores | One Media vs. Check Point Software | One Media vs. Universal Display Corp |
| Premier Foods vs. Invesco Physical Silver | Premier Foods vs. iShares Physical Silver | Premier Foods vs. Atalaya Mining | Premier Foods vs. Pan American Silver |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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