Correlation Between Prime Financial and Hub24
Can any of the company-specific risk be diversified away by investing in both Prime Financial and Hub24 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 Hub24 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 Hub24, you can compare the effects of market volatilities on Prime Financial and Hub24 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 Hub24. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prime Financial and Hub24.
Diversification Opportunities for Prime Financial and Hub24
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Prime and Hub24 is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Prime Financial Group and Hub24 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hub24 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 Hub24. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hub24 has no effect on the direction of Prime Financial i.e., Prime Financial and Hub24 go up and down completely randomly.
Pair Corralation between Prime Financial and Hub24
Assuming the 90 days trading horizon Prime Financial Group is expected to generate 1.7 times more return on investment than Hub24. However, Prime Financial is 1.7 times more volatile than Hub24. It trades about 0.07 of its potential returns per unit of risk. Hub24 is currently generating about -0.06 per unit of risk. If you would invest 23.00 in Prime Financial Group on September 12, 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 | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Prime Financial Group vs. Hub24
Performance |
| Timeline |
| Prime Financial Group |
| Hub24 |
Prime Financial and Hub24 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Prime Financial and Hub24
The main advantage of trading using opposite Prime Financial and Hub24 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prime Financial position performs unexpectedly, Hub24 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 Hub24 will offset losses from the drop in Hub24's long position.| Prime Financial vs. REGAL ASIAN INVESTMENTS | Prime Financial vs. Perseus Mining | Prime Financial vs. Spirit Telecom | Prime Financial vs. Flagship Investments |
| Hub24 vs. Centaurus Metals | Hub24 vs. Alto Metals | Hub24 vs. Treasury Wine Estates | Hub24 vs. Retail Food 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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