Correlation Between Premium Income and Fab Form
Can any of the company-specific risk be diversified away by investing in both Premium Income and Fab Form 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 Premium Income and Fab Form into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Premium Income and Fab Form Industries, you can compare the effects of market volatilities on Premium Income and Fab Form 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 Premium Income with a short position of Fab Form. Check out your portfolio center. Please also check ongoing floating volatility patterns of Premium Income and Fab Form.
Diversification Opportunities for Premium Income and Fab Form
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Premium and Fab is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Premium Income and Fab Form Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fab Form Industries and Premium Income 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 Premium Income are associated (or correlated) with Fab Form. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fab Form Industries has no effect on the direction of Premium Income i.e., Premium Income and Fab Form go up and down completely randomly.
Pair Corralation between Premium Income and Fab Form
Assuming the 90 days trading horizon Premium Income is expected to generate 0.33 times more return on investment than Fab Form. However, Premium Income is 3.01 times less risky than Fab Form. It trades about -0.16 of its potential returns per unit of risk. Fab Form Industries is currently generating about -0.09 per unit of risk. If you would invest 645.00 in Premium Income on August 30, 2024 and sell it today you would lose (40.00) from holding Premium Income or give up 6.2% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Premium Income vs. Fab Form Industries
Performance |
| Timeline |
| Premium Income |
| Fab Form Industries |
Premium Income and Fab Form Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Premium Income and Fab Form
The main advantage of trading using opposite Premium Income and Fab Form positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Premium Income position performs unexpectedly, Fab Form 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 Fab Form will offset losses from the drop in Fab Form's long position.| Premium Income vs. Sprott Physical Gold | Premium Income vs. Brompton Split Banc | Premium Income vs. TDb Split Corp | Premium Income vs. Prime Dividend Corp |
| Fab Form vs. Atlas Engineered Products | Fab Form vs. Inventronics | Fab Form vs. Imaflex | Fab Form vs. AirIQ Inc |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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