Correlation Between Premium Income and Perimeter Medical
Can any of the company-specific risk be diversified away by investing in both Premium Income and Perimeter Medical 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 Perimeter Medical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Premium Income and Perimeter Medical Imaging, you can compare the effects of market volatilities on Premium Income and Perimeter Medical 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 Perimeter Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Premium Income and Perimeter Medical.
Diversification Opportunities for Premium Income and Perimeter Medical
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Premium and Perimeter is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Premium Income and Perimeter Medical Imaging in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Perimeter Medical Imaging 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 Perimeter Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Perimeter Medical Imaging has no effect on the direction of Premium Income i.e., Premium Income and Perimeter Medical go up and down completely randomly.
Pair Corralation between Premium Income and Perimeter Medical
Assuming the 90 days trading horizon Premium Income is expected to generate 0.52 times more return on investment than Perimeter Medical. However, Premium Income is 1.91 times less risky than Perimeter Medical. It trades about -0.02 of its potential returns per unit of risk. Perimeter Medical Imaging is currently generating about -0.02 per unit of risk. If you would invest 980.00 in Premium Income on September 12, 2024 and sell it today you would lose (344.00) from holding Premium Income or give up 35.1% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Premium Income vs. Perimeter Medical Imaging
Performance |
| Timeline |
| Premium Income |
| Perimeter Medical Imaging |
Premium Income and Perimeter Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Premium Income and Perimeter Medical
The main advantage of trading using opposite Premium Income and Perimeter Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Premium Income position performs unexpectedly, Perimeter Medical 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 Perimeter Medical will offset losses from the drop in Perimeter Medical'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 |
| Perimeter Medical vs. Premium Income | Perimeter Medical vs. E L Financial Corp | Perimeter Medical vs. Fairfax Financial Holdings | Perimeter Medical vs. Fairfax Fin Hld |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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