Correlation Between Premier Biomedical and Galexxy Holdings

Can any of the company-specific risk be diversified away by investing in both Premier Biomedical and Galexxy Holdings 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 Premier Biomedical and Galexxy Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Premier Biomedical and Galexxy Holdings, you can compare the effects of market volatilities on Premier Biomedical and Galexxy Holdings 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 Premier Biomedical with a short position of Galexxy Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Premier Biomedical and Galexxy Holdings.

Diversification Opportunities for Premier Biomedical and Galexxy Holdings

0.2

Correlation Coefficient

Premier Biomedical  Galexxy Holdings

Modest diversification

The 3 months correlation between Premier and Galexxy is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Premier Biomedical and Galexxy Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Galexxy Holdings and Premier Biomedical 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 Premier Biomedical are associated (or correlated) with Galexxy Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Galexxy Holdings has no effect on the direction of Premier Biomedical i.e., Premier Biomedical and Galexxy Holdings go up and down completely randomly.

Pair Corralation between Premier Biomedical and Galexxy Holdings

Given the investment horizon of 90 days Premier Biomedical is expected to generate 1.08 times more return on investment than Galexxy Holdings. However, Premier Biomedical is 1.08 times more volatile than Galexxy Holdings. It trades about -0.03 of its potential returns per unit of risk. Galexxy Holdings is currently generating about -0.14 per unit of risk. If you would invest  0.14  in Premier Biomedical on September 2, 2024 and sell it today you would lose (0.06) from holding Premier Biomedical or give up 42.86% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.46%
Values	Daily Returns

Premier Biomedical  vs.  Galexxy Holdings

Premier Biomedical

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Premier Biomedical has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's technical and fundamental indicators remain fairly strong which may send shares a bit higher in January 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Galexxy Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Galexxy Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Premier Biomedical and Galexxy Holdings

The main advantage of trading using opposite Premier Biomedical and Galexxy Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Premier Biomedical position performs unexpectedly, Galexxy Holdings 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 Galexxy Holdings will offset losses from the drop in Galexxy Holdings' long position.

The idea behind Premier Biomedical and Galexxy Holdings pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.