Correlation Between Prime Media and STI Education
Can any of the company-specific risk be diversified away by investing in both Prime Media and STI Education 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 STI Education 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 STI Education Systems, you can compare the effects of market volatilities on Prime Media and STI Education 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 STI Education. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prime Media and STI Education.
Diversification Opportunities for Prime Media and STI Education
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Prime and STI is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Prime Media Holdings and STI Education Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STI Education Systems 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 STI Education. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of STI Education Systems has no effect on the direction of Prime Media i.e., Prime Media and STI Education go up and down completely randomly.
Pair Corralation between Prime Media and STI Education
Assuming the 90 days trading horizon Prime Media Holdings is expected to under-perform the STI Education. In addition to that, Prime Media is 1.9 times more volatile than STI Education Systems. It trades about -0.47 of its total potential returns per unit of risk. STI Education Systems is currently generating about -0.04 per unit of volatility. If you would invest 123.00 in STI Education Systems on September 1, 2024 and sell it today you would lose (2.00) from holding STI Education Systems or give up 1.63% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Prime Media Holdings vs. STI Education Systems
Performance |
| Timeline |
| Prime Media Holdings |
| STI Education Systems |
Prime Media and STI Education Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Prime Media and STI Education
The main advantage of trading using opposite Prime Media and STI Education positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prime Media position performs unexpectedly, STI Education 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 STI Education will offset losses from the drop in STI Education'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 |
| STI Education vs. Allhome Corp | STI Education vs. LFM Properties Corp | STI Education vs. Altus Property Ventures | STI Education vs. Monde Nissin 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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