Correlation Between Premier Foods and Atresmedia
Can any of the company-specific risk be diversified away by investing in both Premier Foods and Atresmedia 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 Premier Foods and Atresmedia into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Premier Foods PLC and Atresmedia, you can compare the effects of market volatilities on Premier Foods and Atresmedia 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 Premier Foods with a short position of Atresmedia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Premier Foods and Atresmedia.
Diversification Opportunities for Premier Foods and Atresmedia
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Premier and Atresmedia is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Premier Foods PLC and Atresmedia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atresmedia and Premier Foods 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 Premier Foods PLC are associated (or correlated) with Atresmedia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atresmedia has no effect on the direction of Premier Foods i.e., Premier Foods and Atresmedia go up and down completely randomly.
Pair Corralation between Premier Foods and Atresmedia
Assuming the 90 days trading horizon Premier Foods PLC is expected to under-perform the Atresmedia. But the stock apears to be less risky and, when comparing its historical volatility, Premier Foods PLC is 1.46 times less risky than Atresmedia. The stock trades about -0.07 of its potential returns per unit of risk. The Atresmedia is currently generating about -0.05 of returns per unit of risk over similar time horizon. If you would invest 453.00 in Atresmedia on October 11, 2024 and sell it today you would lose (7.00) from holding Atresmedia or give up 1.55% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Premier Foods PLC vs. Atresmedia
Performance |
| Timeline |
| Premier Foods PLC |
| Atresmedia |
Premier Foods and Atresmedia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Premier Foods and Atresmedia
The main advantage of trading using opposite Premier Foods and Atresmedia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Premier Foods position performs unexpectedly, Atresmedia 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 Atresmedia will offset losses from the drop in Atresmedia's long position.| Premier Foods vs. Global Net Lease | Premier Foods vs. URU Metals | Premier Foods vs. First Class Metals | Premier Foods vs. Air Products Chemicals |
| Atresmedia vs. Sligro Food Group | Atresmedia vs. Ashtead Technology Holdings | Atresmedia vs. Allianz Technology Trust | Atresmedia vs. Celebrus Technologies plc |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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