Correlation Between Prime Financial and Collins Foods
Can any of the company-specific risk be diversified away by investing in both Prime Financial and Collins Foods 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 Collins Foods 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 Collins Foods, you can compare the effects of market volatilities on Prime Financial and Collins Foods 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 Collins Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prime Financial and Collins Foods.
Diversification Opportunities for Prime Financial and Collins Foods
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Prime and Collins is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Prime Financial Group and Collins Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Collins Foods 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 Collins Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Collins Foods has no effect on the direction of Prime Financial i.e., Prime Financial and Collins Foods go up and down completely randomly.
Pair Corralation between Prime Financial and Collins Foods
Assuming the 90 days trading horizon Prime Financial Group is expected to generate 1.89 times more return on investment than Collins Foods. However, Prime Financial is 1.89 times more volatile than Collins Foods. It trades about 0.03 of its potential returns per unit of risk. Collins Foods is currently generating about -0.05 per unit of risk. If you would invest 22.00 in Prime Financial Group on September 3, 2024 and sell it today you would earn a total of 2.00 from holding Prime Financial Group or generate 9.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Prime Financial Group vs. Collins Foods
Performance |
| Timeline |
| Prime Financial Group |
| Collins Foods |
Prime Financial and Collins Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Prime Financial and Collins Foods
The main advantage of trading using opposite Prime Financial and Collins Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prime Financial position performs unexpectedly, Collins Foods 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 Collins Foods will offset losses from the drop in Collins Foods' long position.| Prime Financial vs. Audio Pixels Holdings | Prime Financial vs. Iodm | Prime Financial vs. TTG Fintech | Prime Financial vs. Mantle Minerals Limited |
| Collins Foods vs. Westpac Banking | Collins Foods vs. Champion Iron | Collins Foods vs. iShares Global Healthcare | Collins Foods vs. Peel Mining |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
Other Complementary Tools
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like |