Correlation Between Spire Healthcare and Premier Foods
Can any of the company-specific risk be diversified away by investing in both Spire Healthcare and Premier Foods 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 Spire Healthcare and Premier Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Spire Healthcare Group and Premier Foods PLC, you can compare the effects of market volatilities on Spire Healthcare and Premier Foods 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 Spire Healthcare with a short position of Premier Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Spire Healthcare and Premier Foods.
Diversification Opportunities for Spire Healthcare and Premier Foods
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Spire and Premier is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Spire Healthcare Group and Premier Foods PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Premier Foods PLC and Spire Healthcare 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 Spire Healthcare Group are associated (or correlated) with Premier Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Premier Foods PLC has no effect on the direction of Spire Healthcare i.e., Spire Healthcare and Premier Foods go up and down completely randomly.
Pair Corralation between Spire Healthcare and Premier Foods
Assuming the 90 days trading horizon Spire Healthcare is expected to generate 1.05 times less return on investment than Premier Foods. In addition to that, Spire Healthcare is 1.01 times more volatile than Premier Foods PLC. It trades about 0.18 of its total potential returns per unit of risk. Premier Foods PLC is currently generating about 0.19 per unit of volatility. If you would invest 18,260 in Premier Foods PLC on September 21, 2024 and sell it today you would earn a total of 800.00 from holding Premier Foods PLC or generate 4.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Spire Healthcare Group vs. Premier Foods PLC
Performance |
| Timeline |
| Spire Healthcare |
| Premier Foods PLC |
Spire Healthcare and Premier Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Spire Healthcare and Premier Foods
The main advantage of trading using opposite Spire Healthcare and Premier Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Spire Healthcare position performs unexpectedly, Premier Foods 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 Premier Foods will offset losses from the drop in Premier Foods' long position.| Spire Healthcare vs. SupplyMe Capital PLC | Spire Healthcare vs. Lloyds Banking Group | Spire Healthcare vs. Premier African Minerals | Spire Healthcare vs. SANTANDER UK 8 |
| Premier Foods vs. Samsung Electronics Co | Premier Foods vs. Samsung Electronics Co | Premier Foods vs. Hyundai Motor | Premier Foods vs. Toyota Motor 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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