Correlation Between Samfine Creation and Premium Catering
Can any of the company-specific risk be diversified away by investing in both Samfine Creation and Premium Catering 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 Samfine Creation and Premium Catering into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Samfine Creation Holdings and Premium Catering Limited, you can compare the effects of market volatilities on Samfine Creation and Premium Catering 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 Samfine Creation with a short position of Premium Catering. Check out your portfolio center. Please also check ongoing floating volatility patterns of Samfine Creation and Premium Catering.
Diversification Opportunities for Samfine Creation and Premium Catering
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Samfine and Premium is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Samfine Creation Holdings and Premium Catering Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Premium Catering and Samfine Creation 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 Samfine Creation Holdings are associated (or correlated) with Premium Catering. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Premium Catering has no effect on the direction of Samfine Creation i.e., Samfine Creation and Premium Catering go up and down completely randomly.
Pair Corralation between Samfine Creation and Premium Catering
Given the investment horizon of 90 days Samfine Creation Holdings is expected to under-perform the Premium Catering. In addition to that, Samfine Creation is 1.52 times more volatile than Premium Catering Limited. It trades about -0.1 of its total potential returns per unit of risk. Premium Catering Limited is currently generating about 0.02 per unit of volatility. If you would invest 69.00 in Premium Catering Limited on October 31, 2024 and sell it today you would lose (1.54) from holding Premium Catering Limited or give up 2.23% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Samfine Creation Holdings vs. Premium Catering Limited
Performance |
| Timeline |
| Samfine Creation Holdings |
| Premium Catering |
Samfine Creation and Premium Catering Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Samfine Creation and Premium Catering
The main advantage of trading using opposite Samfine Creation and Premium Catering positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Samfine Creation position performs unexpectedly, Premium Catering 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 Premium Catering will offset losses from the drop in Premium Catering's long position.| Samfine Creation vs. Alternative Investment | Samfine Creation vs. Codexis | Samfine Creation vs. AA Mission Acquisition | Samfine Creation vs. Nasdaq Inc |
| Premium Catering vs. Kingdee International Software | Premium Catering vs. Integral Ad Science | Premium Catering vs. Pinterest | Premium Catering vs. Coupang LLC |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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