Correlation Between Premier Foods and Intuitive Investments
Can any of the company-specific risk be diversified away by investing in both Premier Foods and Intuitive Investments 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 Intuitive Investments 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 Intuitive Investments Group, you can compare the effects of market volatilities on Premier Foods and Intuitive Investments 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 Intuitive Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Premier Foods and Intuitive Investments.
Diversification Opportunities for Premier Foods and Intuitive Investments
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Premier and Intuitive is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Premier Foods PLC and Intuitive Investments Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intuitive Investments 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 Intuitive Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intuitive Investments has no effect on the direction of Premier Foods i.e., Premier Foods and Intuitive Investments go up and down completely randomly.
Pair Corralation between Premier Foods and Intuitive Investments
Assuming the 90 days trading horizon Premier Foods PLC is expected to generate 0.45 times more return on investment than Intuitive Investments. However, Premier Foods PLC is 2.24 times less risky than Intuitive Investments. It trades about 0.12 of its potential returns per unit of risk. Intuitive Investments Group is currently generating about 0.0 per unit of risk. If you would invest 12,844 in Premier Foods PLC on September 14, 2024 and sell it today you would earn a total of 6,056 from holding Premier Foods PLC or generate 47.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Premier Foods PLC vs. Intuitive Investments Group
Performance |
| Timeline |
| Premier Foods PLC |
| Intuitive Investments |
Premier Foods and Intuitive Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Premier Foods and Intuitive Investments
The main advantage of trading using opposite Premier Foods and Intuitive Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Premier Foods position performs unexpectedly, Intuitive Investments 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 Intuitive Investments will offset losses from the drop in Intuitive Investments' long position.| Premier Foods vs. Samsung Electronics Co | Premier Foods vs. Samsung Electronics Co | Premier Foods vs. Hyundai Motor | Premier Foods vs. Toyota Motor Corp |
| Intuitive Investments vs. Catalyst Media Group | Intuitive Investments vs. CATLIN GROUP | Intuitive Investments vs. Tamburi Investment Partners | Intuitive Investments vs. Magnora ASA |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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