Correlation Between Wallbridge Mining and Premium Brands
Can any of the company-specific risk be diversified away by investing in both Wallbridge Mining and Premium Brands 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 Wallbridge Mining and Premium Brands into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wallbridge Mining and Premium Brands Holdings, you can compare the effects of market volatilities on Wallbridge Mining and Premium Brands 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 Wallbridge Mining with a short position of Premium Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wallbridge Mining and Premium Brands.
Diversification Opportunities for Wallbridge Mining and Premium Brands
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Wallbridge and Premium is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Wallbridge Mining and Premium Brands Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Premium Brands Holdings and Wallbridge Mining 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 Wallbridge Mining are associated (or correlated) with Premium Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Premium Brands Holdings has no effect on the direction of Wallbridge Mining i.e., Wallbridge Mining and Premium Brands go up and down completely randomly.
Pair Corralation between Wallbridge Mining and Premium Brands
Assuming the 90 days horizon Wallbridge Mining is expected to generate 11.32 times more return on investment than Premium Brands. However, Wallbridge Mining is 11.32 times more volatile than Premium Brands Holdings. It trades about 0.09 of its potential returns per unit of risk. Premium Brands Holdings is currently generating about 0.03 per unit of risk. If you would invest 6.00 in Wallbridge Mining on October 24, 2024 and sell it today you would earn a total of 0.50 from holding Wallbridge Mining or generate 8.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wallbridge Mining vs. Premium Brands Holdings
Performance |
| Timeline |
| Wallbridge Mining |
| Premium Brands Holdings |
Wallbridge Mining and Premium Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wallbridge Mining and Premium Brands
The main advantage of trading using opposite Wallbridge Mining and Premium Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wallbridge Mining position performs unexpectedly, Premium Brands 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 Brands will offset losses from the drop in Premium Brands' long position.| Wallbridge Mining vs. Jaguar Mining | Wallbridge Mining vs. Amex Exploration | Wallbridge Mining vs. Lion One Metals |
| Premium Brands vs. CCL Industries | Premium Brands vs. North West | Premium Brands vs. Maple Leaf Foods | Premium Brands vs. FirstService 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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