Correlation Between PetIQ and Prestige Brand
Can any of the company-specific risk be diversified away by investing in both PetIQ and Prestige Brand 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 PetIQ and Prestige Brand into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PetIQ Inc and Prestige Brand Holdings, you can compare the effects of market volatilities on PetIQ and Prestige Brand 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 PetIQ with a short position of Prestige Brand. Check out your portfolio center. Please also check ongoing floating volatility patterns of PetIQ and Prestige Brand.
Diversification Opportunities for PetIQ and Prestige Brand
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between PetIQ and Prestige is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding PetIQ Inc and Prestige Brand Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prestige Brand Holdings and PetIQ 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 PetIQ Inc are associated (or correlated) with Prestige Brand. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prestige Brand Holdings has no effect on the direction of PetIQ i.e., PetIQ and Prestige Brand go up and down completely randomly.
Pair Corralation between PetIQ and Prestige Brand
If you would invest 7,866 in Prestige Brand Holdings on October 20, 2024 and sell it today you would lose (8.00) from holding Prestige Brand Holdings or give up 0.1% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 5.0% |
| Values | Daily Returns |
PetIQ Inc vs. Prestige Brand Holdings
Performance |
| Timeline |
| PetIQ Inc |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Good
| Prestige Brand Holdings |
PetIQ and Prestige Brand Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PetIQ and Prestige Brand
The main advantage of trading using opposite PetIQ and Prestige Brand positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PetIQ position performs unexpectedly, Prestige Brand 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 Prestige Brand will offset losses from the drop in Prestige Brand's long position.| PetIQ vs. Prestige Brand Holdings | PetIQ vs. Collegium Pharmaceutical | PetIQ vs. Regencell Bioscience Holdings | PetIQ vs. Pacira BioSciences, |
| Prestige Brand vs. Evotec SE ADR | Prestige Brand vs. Supernus Pharmaceuticals | Prestige Brand vs. Collegium Pharmaceutical | Prestige Brand vs. Regencell Bioscience Holdings |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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