Correlation Between Prime Media and Manila Mining
Can any of the company-specific risk be diversified away by investing in both Prime Media and Manila Mining 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 Manila Mining 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 Manila Mining Corp, you can compare the effects of market volatilities on Prime Media and Manila Mining 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 Manila Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prime Media and Manila Mining.
Diversification Opportunities for Prime Media and Manila Mining
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Prime and Manila is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Prime Media Holdings and Manila Mining Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Manila Mining Corp 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 Manila Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Manila Mining Corp has no effect on the direction of Prime Media i.e., Prime Media and Manila Mining go up and down completely randomly.
Pair Corralation between Prime Media and Manila Mining
Assuming the 90 days trading horizon Prime Media Holdings is expected to under-perform the Manila Mining. In addition to that, Prime Media is 1.57 times more volatile than Manila Mining Corp. It trades about -0.47 of its total potential returns per unit of risk. Manila Mining Corp is currently generating about -0.66 per unit of volatility. If you would invest 0.36 in Manila Mining Corp on September 1, 2024 and sell it today you would lose (0.05) from holding Manila Mining Corp or give up 13.89% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 52.38% |
| Values | Daily Returns |
Prime Media Holdings vs. Manila Mining Corp
Performance |
| Timeline |
| Prime Media Holdings |
| Manila Mining Corp |
Prime Media and Manila Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Prime Media and Manila Mining
The main advantage of trading using opposite Prime Media and Manila Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prime Media position performs unexpectedly, Manila Mining 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 Manila Mining will offset losses from the drop in Manila Mining'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 |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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