Correlation Between South American and Prestige Brand
Can any of the company-specific risk be diversified away by investing in both South American and Prestige Brand 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 South American and Prestige Brand into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between South American Gold and Prestige Brand Holdings, you can compare the effects of market volatilities on South American and Prestige Brand 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 South American with a short position of Prestige Brand. Check out your portfolio center. Please also check ongoing floating volatility patterns of South American and Prestige Brand.
Diversification Opportunities for South American and Prestige Brand
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between South and Prestige is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding South American Gold and Prestige Brand Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prestige Brand Holdings and South American 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 South American Gold are associated (or correlated) with Prestige Brand. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prestige Brand Holdings has no effect on the direction of South American i.e., South American and Prestige Brand go up and down completely randomly.
Pair Corralation between South American and Prestige Brand
Given the investment horizon of 90 days South American Gold is expected to generate 127.28 times more return on investment than Prestige Brand. However, South American is 127.28 times more volatile than Prestige Brand Holdings. It trades about 0.16 of its potential returns per unit of risk. Prestige Brand Holdings is currently generating about 0.05 per unit of risk. If you would invest 0.01 in South American Gold on September 2, 2024 and sell it today you would lose (0.01) from holding South American Gold or give up 100.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
South American Gold vs. Prestige Brand Holdings
Performance |
| Timeline |
| South American Gold |
| Prestige Brand Holdings |
South American and Prestige Brand Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with South American and Prestige Brand
The main advantage of trading using opposite South American and Prestige Brand positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if South American position performs unexpectedly, Prestige Brand 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 Prestige Brand will offset losses from the drop in Prestige Brand's long position.| South American vs. Pacira BioSciences, | South American vs. Collegium Pharmaceutical | South American vs. Prestige Brand Holdings | South American vs. Phibro Animal Health |
| Prestige Brand vs. Crinetics Pharmaceuticals | Prestige Brand vs. Enanta Pharmaceuticals | Prestige Brand vs. Amicus Therapeutics | Prestige Brand vs. Connect Biopharma Holdings |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
Other Complementary Tools
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges |