Correlation Between Premier Foods and Sharing Services
Can any of the company-specific risk be diversified away by investing in both Premier Foods and Sharing Services 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 Sharing Services 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 Sharing Services Global, you can compare the effects of market volatilities on Premier Foods and Sharing Services 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 Sharing Services. Check out your portfolio center. Please also check ongoing floating volatility patterns of Premier Foods and Sharing Services.
Diversification Opportunities for Premier Foods and Sharing Services
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Premier and Sharing is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Premier Foods Plc and Sharing Services Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sharing Services Global 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 Sharing Services. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sharing Services Global has no effect on the direction of Premier Foods i.e., Premier Foods and Sharing Services go up and down completely randomly.
Pair Corralation between Premier Foods and Sharing Services
If you would invest 18.00 in Sharing Services Global on August 31, 2024 and sell it today you would earn a total of 17.00 from holding Sharing Services Global or generate 94.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 4.55% |
| Values | Daily Returns |
Premier Foods Plc vs. Sharing Services Global
Performance |
| Timeline |
| Premier Foods Plc |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Sharing Services Global |
Premier Foods and Sharing Services Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Premier Foods and Sharing Services
The main advantage of trading using opposite Premier Foods and Sharing Services positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Premier Foods position performs unexpectedly, Sharing Services 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 Sharing Services will offset losses from the drop in Sharing Services' 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 |
| Sharing Services vs. Seneca Foods Corp | Sharing Services vs. Bridgford Foods | Sharing Services vs. J J Snack | Sharing Services vs. Central Garden Pet |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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