Correlation Between Premier Foods and Creo Medical
Can any of the company-specific risk be diversified away by investing in both Premier Foods and Creo Medical 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 Creo Medical 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 Creo Medical Group, you can compare the effects of market volatilities on Premier Foods and Creo Medical 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 Creo Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Premier Foods and Creo Medical.
Diversification Opportunities for Premier Foods and Creo Medical
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Premier and Creo is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Premier Foods PLC and Creo Medical Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Creo Medical Group 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 Creo Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Creo Medical Group has no effect on the direction of Premier Foods i.e., Premier Foods and Creo Medical go up and down completely randomly.
Pair Corralation between Premier Foods and Creo Medical
Assuming the 90 days trading horizon Premier Foods PLC is expected to generate 0.54 times more return on investment than Creo Medical. However, Premier Foods PLC is 1.84 times less risky than Creo Medical. It trades about 0.02 of its potential returns per unit of risk. Creo Medical Group is currently generating about -0.11 per unit of risk. If you would invest 18,580 in Premier Foods PLC on November 5, 2024 and sell it today you would earn a total of 60.00 from holding Premier Foods PLC or generate 0.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Premier Foods PLC vs. Creo Medical Group
Performance |
| Timeline |
| Premier Foods PLC |
| Creo Medical Group |
Premier Foods and Creo Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Premier Foods and Creo Medical
The main advantage of trading using opposite Premier Foods and Creo Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Premier Foods position performs unexpectedly, Creo Medical 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 Creo Medical will offset losses from the drop in Creo Medical's long position.| Premier Foods vs. Take Two Interactive Software | Premier Foods vs. TechnipFMC PLC | Premier Foods vs. DXC Technology Co | Premier Foods vs. Vitec Software Group |
| Creo Medical vs. Fevertree Drinks Plc | Creo Medical vs. Automatic Data Processing | Creo Medical vs. Associated British Foods | Creo Medical vs. Premier Foods 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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