Correlation Between Prime Media and Converge Information
Can any of the company-specific risk be diversified away by investing in both Prime Media and Converge Information 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 Prime Media and Converge Information into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Prime Media Holdings and Converge Information Communications, you can compare the effects of market volatilities on Prime Media and Converge Information 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 Prime Media with a short position of Converge Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prime Media and Converge Information.
Diversification Opportunities for Prime Media and Converge Information
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Prime and Converge is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Prime Media Holdings and Converge Information Communica in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Converge Information and Prime Media 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 Prime Media Holdings are associated (or correlated) with Converge Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Converge Information has no effect on the direction of Prime Media i.e., Prime Media and Converge Information go up and down completely randomly.
Pair Corralation between Prime Media and Converge Information
Assuming the 90 days trading horizon Prime Media Holdings is expected to under-perform the Converge Information. In addition to that, Prime Media is 1.36 times more volatile than Converge Information Communications. It trades about -0.47 of its total potential returns per unit of risk. Converge Information Communications is currently generating about 0.05 per unit of volatility. If you would invest 1,610 in Converge Information Communications on September 1, 2024 and sell it today you would earn a total of 30.00 from holding Converge Information Communications or generate 1.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Prime Media Holdings vs. Converge Information Communica
Performance |
| Timeline |
| Prime Media Holdings |
| Converge Information |
Prime Media and Converge Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Prime Media and Converge Information
The main advantage of trading using opposite Prime Media and Converge Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prime Media position performs unexpectedly, Converge Information 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 Converge Information will offset losses from the drop in Converge Information's long position.| Prime Media vs. GT Capital Holdings | Prime Media vs. Allhome Corp | Prime Media vs. Jollibee Foods Corp | Prime Media vs. LFM Properties Corp |
| Converge Information vs. Dito CME Holdings | Converge Information vs. Allhome Corp | Converge Information vs. LFM Properties Corp | Converge Information vs. Altus Property Ventures |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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