Correlation Between Premier Marketing and Firetrade Engineering
Can any of the company-specific risk be diversified away by investing in both Premier Marketing and Firetrade Engineering 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 Marketing and Firetrade Engineering into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Premier Marketing Public and Firetrade Engineering Public, you can compare the effects of market volatilities on Premier Marketing and Firetrade Engineering 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 Marketing with a short position of Firetrade Engineering. Check out your portfolio center. Please also check ongoing floating volatility patterns of Premier Marketing and Firetrade Engineering.
Diversification Opportunities for Premier Marketing and Firetrade Engineering
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Premier and Firetrade is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Premier Marketing Public and Firetrade Engineering Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Firetrade Engineering and Premier Marketing 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 Marketing Public are associated (or correlated) with Firetrade Engineering. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Firetrade Engineering has no effect on the direction of Premier Marketing i.e., Premier Marketing and Firetrade Engineering go up and down completely randomly.
Pair Corralation between Premier Marketing and Firetrade Engineering
Assuming the 90 days horizon Premier Marketing Public is expected to under-perform the Firetrade Engineering. But the stock apears to be less risky and, when comparing its historical volatility, Premier Marketing Public is 1.34 times less risky than Firetrade Engineering. The stock trades about -0.17 of its potential returns per unit of risk. The Firetrade Engineering Public is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 146.00 in Firetrade Engineering Public on September 13, 2024 and sell it today you would earn a total of 7.00 from holding Firetrade Engineering Public or generate 4.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Premier Marketing Public vs. Firetrade Engineering Public
Performance |
| Timeline |
| Premier Marketing Public |
| Firetrade Engineering |
Premier Marketing and Firetrade Engineering Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Premier Marketing and Firetrade Engineering
The main advantage of trading using opposite Premier Marketing and Firetrade Engineering positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Premier Marketing position performs unexpectedly, Firetrade Engineering 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 Firetrade Engineering will offset losses from the drop in Firetrade Engineering's long position.| Premier Marketing vs. Haad Thip Public | Premier Marketing vs. MK Restaurant Group | Premier Marketing vs. Thai Union Group | Premier Marketing vs. Taokaenoi Food Marketing |
| Firetrade Engineering vs. Tata Steel Public | Firetrade Engineering vs. TTCL Public | Firetrade Engineering vs. Thaifoods Group Public | Firetrade Engineering vs. TMT Steel Public |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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