Correlation Between Prime Financial and Stelar Metals
Can any of the company-specific risk be diversified away by investing in both Prime Financial and Stelar Metals 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 Stelar Metals 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 Stelar Metals, you can compare the effects of market volatilities on Prime Financial and Stelar Metals 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 Stelar Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prime Financial and Stelar Metals.
Diversification Opportunities for Prime Financial and Stelar Metals
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Prime and Stelar is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Prime Financial Group and Stelar Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stelar Metals 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 Stelar Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stelar Metals has no effect on the direction of Prime Financial i.e., Prime Financial and Stelar Metals go up and down completely randomly.
Pair Corralation between Prime Financial and Stelar Metals
Assuming the 90 days trading horizon Prime Financial Group is expected to generate 0.77 times more return on investment than Stelar Metals. However, Prime Financial Group is 1.3 times less risky than Stelar Metals. It trades about 0.01 of its potential returns per unit of risk. Stelar Metals is currently generating about -0.29 per unit of risk. If you would invest 23.00 in Prime Financial Group on August 29, 2024 and sell it today you would earn a total of 0.00 from holding Prime Financial Group or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Prime Financial Group vs. Stelar Metals
Performance |
| Timeline |
| Prime Financial Group |
| Stelar Metals |
Prime Financial and Stelar Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Prime Financial and Stelar Metals
The main advantage of trading using opposite Prime Financial and Stelar Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prime Financial position performs unexpectedly, Stelar Metals 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 Stelar Metals will offset losses from the drop in Stelar Metals' long position.| Prime Financial vs. TPG Telecom | Prime Financial vs. Singular Health Group | Prime Financial vs. Kingsrose Mining | Prime Financial vs. Fisher Paykel Healthcare |
| Stelar Metals vs. Northern Star Resources | Stelar Metals vs. Evolution Mining | Stelar Metals vs. Bluescope Steel | Stelar Metals vs. Sandfire Resources NL |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
Other Complementary Tools
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance |