Correlation Between Top Frontier and Prime Media
Can any of the company-specific risk be diversified away by investing in both Top Frontier and Prime Media 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 Top Frontier and Prime Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Top Frontier Investment and Prime Media Holdings, you can compare the effects of market volatilities on Top Frontier and Prime Media 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 Top Frontier with a short position of Prime Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Top Frontier and Prime Media.
Diversification Opportunities for Top Frontier and Prime Media
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Top and Prime is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Top Frontier Investment and Prime Media Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prime Media Holdings and Top Frontier 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 Top Frontier Investment are associated (or correlated) with Prime Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prime Media Holdings has no effect on the direction of Top Frontier i.e., Top Frontier and Prime Media go up and down completely randomly.
Pair Corralation between Top Frontier and Prime Media
Assuming the 90 days trading horizon Top Frontier Investment is expected to generate 0.56 times more return on investment than Prime Media. However, Top Frontier Investment is 1.78 times less risky than Prime Media. It trades about -0.34 of its potential returns per unit of risk. Prime Media Holdings is currently generating about -0.22 per unit of risk. If you would invest 6,495 in Top Frontier Investment on November 27, 2024 and sell it today you would lose (495.00) from holding Top Frontier Investment or give up 7.62% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 89.47% |
| Values | Daily Returns |
Top Frontier Investment vs. Prime Media Holdings
Performance |
| Timeline |
| Top Frontier Investment |
| Prime Media Holdings |
Top Frontier and Prime Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Top Frontier and Prime Media
The main advantage of trading using opposite Top Frontier and Prime Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Top Frontier position performs unexpectedly, Prime Media 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 Prime Media will offset losses from the drop in Prime Media's long position.| Top Frontier vs. Philex Mining Corp | Top Frontier vs. Premiere Entertainment | Top Frontier vs. Jollibee Foods Corp | Top Frontier vs. Semirara Mining Corp |
| Prime Media vs. Crown Asia Chemicals | Prime Media vs. Asia United Bank | Prime Media vs. Cebu Air Preferred | Prime Media vs. Rizal Commercial Banking |
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.
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