Correlation Between Prime Financial and Accent Resources
Can any of the company-specific risk be diversified away by investing in both Prime Financial and Accent Resources 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 Prime Financial and Accent Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Prime Financial Group and Accent Resources NL, you can compare the effects of market volatilities on Prime Financial and Accent Resources 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 Prime Financial with a short position of Accent Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prime Financial and Accent Resources.
Diversification Opportunities for Prime Financial and Accent Resources
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Prime and Accent is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Prime Financial Group and Accent Resources NL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Accent Resources and Prime Financial 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 Prime Financial Group are associated (or correlated) with Accent Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Accent Resources has no effect on the direction of Prime Financial i.e., Prime Financial and Accent Resources go up and down completely randomly.
Pair Corralation between Prime Financial and Accent Resources
Assuming the 90 days trading horizon Prime Financial Group is expected to generate 0.62 times more return on investment than Accent Resources. However, Prime Financial Group is 1.62 times less risky than Accent Resources. It trades about 0.02 of its potential returns per unit of risk. Accent Resources NL is currently generating about -0.02 per unit of risk. If you would invest 20.00 in Prime Financial Group on August 30, 2024 and sell it today you would earn a total of 3.00 from holding Prime Financial Group or generate 15.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Prime Financial Group vs. Accent Resources NL
Performance |
| Timeline |
| Prime Financial Group |
| Accent Resources |
Prime Financial and Accent Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Prime Financial and Accent Resources
The main advantage of trading using opposite Prime Financial and Accent Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prime Financial position performs unexpectedly, Accent Resources 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 Accent Resources will offset losses from the drop in Accent Resources' long position.| Prime Financial vs. Champion Iron | Prime Financial vs. Ridley | Prime Financial vs. Peel Mining | Prime Financial vs. Australian Dairy Farms |
| Accent Resources vs. Qbe Insurance Group | Accent Resources vs. Epsilon Healthcare | Accent Resources vs. Oneview Healthcare PLC | Accent Resources vs. Oceania Healthcare |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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