Correlation Between Perimeter Medical and Premium Income
Can any of the company-specific risk be diversified away by investing in both Perimeter Medical and Premium Income 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 Perimeter Medical and Premium Income into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Perimeter Medical Imaging and Premium Income, you can compare the effects of market volatilities on Perimeter Medical and Premium Income 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 Perimeter Medical with a short position of Premium Income. Check out your portfolio center. Please also check ongoing floating volatility patterns of Perimeter Medical and Premium Income.
Diversification Opportunities for Perimeter Medical and Premium Income
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Perimeter and Premium is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Perimeter Medical Imaging and Premium Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Premium Income and Perimeter Medical 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 Perimeter Medical Imaging are associated (or correlated) with Premium Income. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Premium Income has no effect on the direction of Perimeter Medical i.e., Perimeter Medical and Premium Income go up and down completely randomly.
Pair Corralation between Perimeter Medical and Premium Income
Assuming the 90 days trading horizon Perimeter Medical Imaging is expected to generate 6.31 times more return on investment than Premium Income. However, Perimeter Medical is 6.31 times more volatile than Premium Income. It trades about 0.14 of its potential returns per unit of risk. Premium Income is currently generating about -0.03 per unit of risk. If you would invest 44.00 in Perimeter Medical Imaging on September 13, 2024 and sell it today you would earn a total of 7.00 from holding Perimeter Medical Imaging or generate 15.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Perimeter Medical Imaging vs. Premium Income
Performance |
| Timeline |
| Perimeter Medical Imaging |
| Premium Income |
Perimeter Medical and Premium Income Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Perimeter Medical and Premium Income
The main advantage of trading using opposite Perimeter Medical and Premium Income positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Perimeter Medical position performs unexpectedly, Premium Income 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 Premium Income will offset losses from the drop in Premium Income's long position.| Perimeter Medical vs. JPMorgan Chase Co | Perimeter Medical vs. Bank of America | Perimeter Medical vs. Toronto Dominion Bank | Perimeter Medical vs. Royal Bank of |
| Premium Income vs. Berkshire Hathaway CDR | Premium Income vs. E L Financial Corp | Premium Income vs. E L Financial 3 | Premium Income vs. Molson Coors Canada |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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