Correlation Between Primorus Investments and Bath Body
Can any of the company-specific risk be diversified away by investing in both Primorus Investments and Bath Body 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 Primorus Investments and Bath Body into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Primorus Investments plc and Bath Body Works, you can compare the effects of market volatilities on Primorus Investments and Bath Body 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 Primorus Investments with a short position of Bath Body. Check out your portfolio center. Please also check ongoing floating volatility patterns of Primorus Investments and Bath Body.
Diversification Opportunities for Primorus Investments and Bath Body
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Primorus and Bath is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Primorus Investments plc and Bath Body Works in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bath Body Works and Primorus 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 Primorus Investments plc are associated (or correlated) with Bath Body. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bath Body Works has no effect on the direction of Primorus Investments i.e., Primorus Investments and Bath Body go up and down completely randomly.
Pair Corralation between Primorus Investments and Bath Body
Assuming the 90 days trading horizon Primorus Investments plc is expected to generate 0.71 times more return on investment than Bath Body. However, Primorus Investments plc is 1.42 times less risky than Bath Body. It trades about 0.12 of its potential returns per unit of risk. Bath Body Works is currently generating about -0.12 per unit of risk. If you would invest 385.00 in Primorus Investments plc on October 12, 2024 and sell it today you would earn a total of 15.00 from holding Primorus Investments plc or generate 3.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Primorus Investments plc vs. Bath Body Works
Performance |
| Timeline |
| Primorus Investments plc |
| Bath Body Works |
Primorus Investments and Bath Body Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Primorus Investments and Bath Body
The main advantage of trading using opposite Primorus Investments and Bath Body positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Primorus Investments position performs unexpectedly, Bath Body 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 Bath Body will offset losses from the drop in Bath Body's long position.| Primorus Investments vs. Air Products Chemicals | Primorus Investments vs. Cairo Communication SpA | Primorus Investments vs. Zegona Communications Plc | Primorus Investments vs. Gamma Communications PLC |
| Bath Body vs. Smithson Investment Trust | Bath Body vs. Tavistock Investments Plc | Bath Body vs. Primorus Investments plc | Bath Body vs. Foresight Environmental Infrastructure |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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