Correlation Between Prime Financial and FleetPartners
Can any of the company-specific risk be diversified away by investing in both Prime Financial and FleetPartners 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 FleetPartners 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 FleetPartners Group, you can compare the effects of market volatilities on Prime Financial and FleetPartners 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 FleetPartners. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prime Financial and FleetPartners.
Diversification Opportunities for Prime Financial and FleetPartners
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Prime and FleetPartners is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Prime Financial Group and FleetPartners Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FleetPartners Group 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 FleetPartners. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FleetPartners Group has no effect on the direction of Prime Financial i.e., Prime Financial and FleetPartners go up and down completely randomly.
Pair Corralation between Prime Financial and FleetPartners
Assuming the 90 days trading horizon Prime Financial Group is expected to generate 1.53 times more return on investment than FleetPartners. However, Prime Financial is 1.53 times more volatile than FleetPartners Group. It trades about 0.08 of its potential returns per unit of risk. FleetPartners Group is currently generating about 0.1 per unit of risk. If you would invest 23.00 in Prime Financial Group on September 14, 2024 and sell it today you would earn a total of 1.00 from holding Prime Financial Group or generate 4.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Prime Financial Group vs. FleetPartners Group
Performance |
| Timeline |
| Prime Financial Group |
| FleetPartners Group |
Prime Financial and FleetPartners Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Prime Financial and FleetPartners
The main advantage of trading using opposite Prime Financial and FleetPartners positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prime Financial position performs unexpectedly, FleetPartners 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 FleetPartners will offset losses from the drop in FleetPartners' long position.| Prime Financial vs. Regis Healthcare | Prime Financial vs. Austco Healthcare | Prime Financial vs. Super Retail Group | Prime Financial vs. My Foodie Box |
| FleetPartners vs. Credit Clear | FleetPartners vs. Bell Financial Group | FleetPartners vs. Prime Financial Group | FleetPartners vs. Finexia Financial Group |
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 CEOs Directory module to screen CEOs from public companies around the world.
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