Correlation Between Premier Foods and MusclePharm
Can any of the company-specific risk be diversified away by investing in both Premier Foods and MusclePharm 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 Premier Foods and MusclePharm into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Premier Foods Plc and MusclePharm, you can compare the effects of market volatilities on Premier Foods and MusclePharm 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 Premier Foods with a short position of MusclePharm. Check out your portfolio center. Please also check ongoing floating volatility patterns of Premier Foods and MusclePharm.
Diversification Opportunities for Premier Foods and MusclePharm
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Premier and MusclePharm is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Premier Foods Plc and MusclePharm in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MusclePharm and Premier Foods 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 Premier Foods Plc are associated (or correlated) with MusclePharm. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MusclePharm has no effect on the direction of Premier Foods i.e., Premier Foods and MusclePharm go up and down completely randomly.
Pair Corralation between Premier Foods and MusclePharm
Assuming the 90 days horizon Premier Foods is expected to generate 11.67 times less return on investment than MusclePharm. But when comparing it to its historical volatility, Premier Foods Plc is 25.5 times less risky than MusclePharm. It trades about 0.14 of its potential returns per unit of risk. MusclePharm is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 0.30 in MusclePharm on September 1, 2024 and sell it today you would lose (0.30) from holding MusclePharm or give up 100.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 37.74% |
| Values | Daily Returns |
Premier Foods Plc vs. MusclePharm
Performance |
| Timeline |
| Premier Foods Plc |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| MusclePharm |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Premier Foods and MusclePharm Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Premier Foods and MusclePharm
The main advantage of trading using opposite Premier Foods and MusclePharm positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Premier Foods position performs unexpectedly, MusclePharm 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 MusclePharm will offset losses from the drop in MusclePharm's long position.| Premier Foods vs. Torque Lifestyle Brands | Premier Foods vs. Naturally Splendid Enterprises | Premier Foods vs. Aryzta AG PK | Premier Foods vs. Premier Foods Plc |
| MusclePharm vs. Chimerix | MusclePharm vs. Apogee Therapeutics, Common | MusclePharm vs. Canlan Ice Sports | MusclePharm vs. United Parks Resorts |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
Other Complementary Tools
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios |