Correlation Between Prime Media and Security Bank
Can any of the company-specific risk be diversified away by investing in both Prime Media and Security Bank 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 Security Bank 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 Security Bank Corp, you can compare the effects of market volatilities on Prime Media and Security Bank 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 Security Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prime Media and Security Bank.
Diversification Opportunities for Prime Media and Security Bank
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Prime and Security is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Prime Media Holdings and Security Bank Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Security Bank 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 Security Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Security Bank Corp has no effect on the direction of Prime Media i.e., Prime Media and Security Bank go up and down completely randomly.
Pair Corralation between Prime Media and Security Bank
Assuming the 90 days trading horizon Prime Media Holdings is expected to under-perform the Security Bank. In addition to that, Prime Media is 1.37 times more volatile than Security Bank Corp. It trades about -0.35 of its total potential returns per unit of risk. Security Bank Corp is currently generating about -0.11 per unit of volatility. If you would invest 9,241 in Security Bank Corp on August 28, 2024 and sell it today you would lose (586.00) from holding Security Bank Corp or give up 6.34% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Prime Media Holdings vs. Security Bank Corp
Performance |
| Timeline |
| Prime Media Holdings |
| Security Bank Corp |
Prime Media and Security Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Prime Media and Security Bank
The main advantage of trading using opposite Prime Media and Security Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prime Media position performs unexpectedly, Security Bank 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 Security Bank will offset losses from the drop in Security Bank's long position.| Prime Media vs. Asia United Bank | Prime Media vs. Metro Retail Stores | Prime Media vs. BDO Unibank | Prime Media vs. Converge Information Communications |
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 Channel module to use Commodity Channel Index to analyze current equity momentum.
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