Correlation Between Premium Income and Stingray
Can any of the company-specific risk be diversified away by investing in both Premium Income and Stingray 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 Stingray into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Premium Income and Stingray Group, you can compare the effects of market volatilities on Premium Income and Stingray 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 Stingray. Check out your portfolio center. Please also check ongoing floating volatility patterns of Premium Income and Stingray.
Diversification Opportunities for Premium Income and Stingray
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Premium and Stingray is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Premium Income and Stingray Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stingray Group 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 Stingray. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stingray Group has no effect on the direction of Premium Income i.e., Premium Income and Stingray go up and down completely randomly.
Pair Corralation between Premium Income and Stingray
Assuming the 90 days trading horizon Premium Income is expected to generate 1.2 times more return on investment than Stingray. However, Premium Income is 1.2 times more volatile than Stingray Group. It trades about -0.06 of its potential returns per unit of risk. Stingray Group is currently generating about -0.38 per unit of risk. If you would invest 618.00 in Premium Income on September 25, 2024 and sell it today you would lose (9.00) from holding Premium Income or give up 1.46% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Premium Income vs. Stingray Group
Performance |
| Timeline |
| Premium Income |
| Stingray Group |
Premium Income and Stingray Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Premium Income and Stingray
The main advantage of trading using opposite Premium Income and Stingray positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Premium Income position performs unexpectedly, Stingray 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 Stingray will offset losses from the drop in Stingray's long position.| Premium Income vs. Berkshire Hathaway CDR | Premium Income vs. JPMorgan Chase Co | Premium Income vs. Bank of America | Premium Income vs. Alphabet Inc CDR |
| Stingray vs. Premium Income | Stingray vs. E L Financial Corp | Stingray vs. Fairfax Financial Holdings | Stingray vs. Fairfax Financial Holdings |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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