Correlation Between Premier Marketing and Peoples Garment
Can any of the company-specific risk be diversified away by investing in both Premier Marketing and Peoples Garment 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 Peoples Garment 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 Peoples Garment Public, you can compare the effects of market volatilities on Premier Marketing and Peoples Garment 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 Peoples Garment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Premier Marketing and Peoples Garment.
Diversification Opportunities for Premier Marketing and Peoples Garment
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Premier and Peoples is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Premier Marketing Public and Peoples Garment Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Peoples Garment Public 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 Peoples Garment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Peoples Garment Public has no effect on the direction of Premier Marketing i.e., Premier Marketing and Peoples Garment go up and down completely randomly.
Pair Corralation between Premier Marketing and Peoples Garment
Assuming the 90 days horizon Premier Marketing Public is expected to generate 7.45 times more return on investment than Peoples Garment. However, Premier Marketing is 7.45 times more volatile than Peoples Garment Public. It trades about 0.16 of its potential returns per unit of risk. Peoples Garment Public is currently generating about -0.07 per unit of risk. If you would invest 860.00 in Premier Marketing Public on August 27, 2024 and sell it today you would earn a total of 75.00 from holding Premier Marketing Public or generate 8.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Premier Marketing Public vs. Peoples Garment Public
Performance |
| Timeline |
| Premier Marketing Public |
| Peoples Garment Public |
Premier Marketing and Peoples Garment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Premier Marketing and Peoples Garment
The main advantage of trading using opposite Premier Marketing and Peoples Garment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Premier Marketing position performs unexpectedly, Peoples Garment 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 Peoples Garment will offset losses from the drop in Peoples Garment's long position.The idea behind Premier Marketing Public and Peoples Garment Public pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Peoples Garment vs. SCB X Public | Peoples Garment vs. Kasikornbank Public | Peoples Garment vs. PTT Public | Peoples Garment vs. Kasikornbank 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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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