Correlation Between Premier Technology and United Palm
Can any of the company-specific risk be diversified away by investing in both Premier Technology and United Palm 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 Premier Technology and United Palm into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Premier Technology Public and United Palm Oil, you can compare the effects of market volatilities on Premier Technology and United Palm 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 Premier Technology with a short position of United Palm. Check out your portfolio center. Please also check ongoing floating volatility patterns of Premier Technology and United Palm.
Diversification Opportunities for Premier Technology and United Palm
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Premier and United is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Premier Technology Public and United Palm Oil in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Palm Oil and Premier Technology 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 Premier Technology Public are associated (or correlated) with United Palm. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Palm Oil has no effect on the direction of Premier Technology i.e., Premier Technology and United Palm go up and down completely randomly.
Pair Corralation between Premier Technology and United Palm
Assuming the 90 days horizon Premier Technology Public is expected to generate 0.64 times more return on investment than United Palm. However, Premier Technology Public is 1.56 times less risky than United Palm. It trades about 0.12 of its potential returns per unit of risk. United Palm Oil is currently generating about 0.06 per unit of risk. If you would invest 955.00 in Premier Technology Public on August 28, 2024 and sell it today you would earn a total of 20.00 from holding Premier Technology Public or generate 2.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Premier Technology Public vs. United Palm Oil
Performance |
| Timeline |
| Premier Technology Public |
| United Palm Oil |
Premier Technology and United Palm Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Premier Technology and United Palm
The main advantage of trading using opposite Premier Technology and United Palm positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Premier Technology position performs unexpectedly, United Palm 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 United Palm will offset losses from the drop in United Palm's long position.| Premier Technology vs. AP Public | Premier Technology vs. Jasmine International Public | Premier Technology vs. Asia Plus Group | Premier Technology vs. Bangkok Aviation Fuel |
| United Palm vs. Univanich Palm Oil | United Palm vs. Chumporn Palm Oil | United Palm vs. Lam Soon Public | United Palm vs. United Paper Public |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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