Correlation Between BRNPB and Premiere Entertainment

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

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

Diversification Opportunities for BRNPB and Premiere Entertainment

-0.36

Correlation Coefficient

BRNPB  Premiere Entertainment

Very good diversification

The 3 months correlation between BRNPB and Premiere is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding BRNPB and Premiere Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Premiere Entertainment and BRNPB 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 BRNPB are associated (or correlated) with Premiere Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Premiere Entertainment has no effect on the direction of BRNPB i.e., BRNPB and Premiere Entertainment go up and down completely randomly.

Pair Corralation between BRNPB and Premiere Entertainment

Assuming the 90 days trading horizon BRNPB is expected to generate 7.28 times less return on investment than Premiere Entertainment. But when comparing it to its historical volatility, BRNPB is 1.69 times less risky than Premiere Entertainment. It trades about 0.0 of its potential returns per unit of risk. Premiere Entertainment is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  17.00  in Premiere Entertainment on October 24, 2024 and sell it today you would earn a total of  0.00  from holding Premiere Entertainment or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	36.82%
Values	Daily Returns

BRNPB  vs.  Premiere Entertainment

BRNPB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BRNPB has generated negative risk-adjusted returns adding no value to investors with long positions. Even with unsteady performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in February 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Premiere Entertainment

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Premiere Entertainment has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with BRNPB and Premiere Entertainment

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

The idea behind BRNPB and Premiere Entertainment 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.