Correlation Between Premier Investments and Australian United
Can any of the company-specific risk be diversified away by investing in both Premier Investments and Australian United 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 Investments and Australian United into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Premier Investments and Australian United Investment, you can compare the effects of market volatilities on Premier Investments and Australian United 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 Investments with a short position of Australian United. Check out your portfolio center. Please also check ongoing floating volatility patterns of Premier Investments and Australian United.
Diversification Opportunities for Premier Investments and Australian United
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Premier and Australian is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Premier Investments and Australian United Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Australian United and Premier Investments 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 Investments are associated (or correlated) with Australian United. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Australian United has no effect on the direction of Premier Investments i.e., Premier Investments and Australian United go up and down completely randomly.
Pair Corralation between Premier Investments and Australian United
Assuming the 90 days trading horizon Premier Investments is expected to generate 2.48 times more return on investment than Australian United. However, Premier Investments is 2.48 times more volatile than Australian United Investment. It trades about 0.07 of its potential returns per unit of risk. Australian United Investment is currently generating about 0.05 per unit of risk. If you would invest 2,580 in Premier Investments on September 14, 2024 and sell it today you would earn a total of 837.00 from holding Premier Investments or generate 32.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Premier Investments vs. Australian United Investment
Performance |
| Timeline |
| Premier Investments |
| Australian United |
Premier Investments and Australian United Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Premier Investments and Australian United
The main advantage of trading using opposite Premier Investments and Australian United positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Premier Investments position performs unexpectedly, Australian United 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 Australian United will offset losses from the drop in Australian United's long position.| Premier Investments vs. Hutchison Telecommunications | Premier Investments vs. Energy Resources | Premier Investments vs. GO2 People | Premier Investments vs. Pact Group Holdings |
| Australian United vs. Stelar Metals | Australian United vs. Carnegie Clean Energy | Australian United vs. Sky Metals | Australian United vs. Air New Zealand |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
Other Complementary Tools
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators |