Correlation Between COMBA TELECOM and Premier Foods
Can any of the company-specific risk be diversified away by investing in both COMBA TELECOM 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 COMBA TELECOM and Premier Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between COMBA TELECOM SYST and Premier Foods PLC, you can compare the effects of market volatilities on COMBA TELECOM 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 COMBA TELECOM with a short position of Premier Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of COMBA TELECOM and Premier Foods.
Diversification Opportunities for COMBA TELECOM and Premier Foods
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between COMBA and Premier is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding COMBA TELECOM SYST 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 COMBA TELECOM 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 COMBA TELECOM SYST 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 COMBA TELECOM i.e., COMBA TELECOM and Premier Foods go up and down completely randomly.
Pair Corralation between COMBA TELECOM and Premier Foods
Assuming the 90 days trading horizon COMBA TELECOM SYST is expected to under-perform the Premier Foods. In addition to that, COMBA TELECOM is 1.26 times more volatile than Premier Foods PLC. It trades about -0.07 of its total potential returns per unit of risk. Premier Foods PLC is currently generating about 0.14 per unit of volatility. If you would invest 208.00 in Premier Foods PLC on September 5, 2024 and sell it today you would earn a total of 24.00 from holding Premier Foods PLC or generate 11.54% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
COMBA TELECOM SYST vs. Premier Foods PLC
Performance |
Timeline |
COMBA TELECOM SYST |
Premier Foods PLC |
COMBA TELECOM and Premier Foods Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with COMBA TELECOM and Premier Foods
The main advantage of trading using opposite COMBA TELECOM and Premier Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if COMBA TELECOM 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.COMBA TELECOM vs. TOTAL GABON | COMBA TELECOM vs. Walgreens Boots Alliance | COMBA TELECOM vs. Peak Resources Limited |
Premier Foods vs. JJ SNACK FOODS | Premier Foods vs. Dave Busters Entertainment | Premier Foods vs. HF FOODS GRP | Premier Foods vs. Hollywood Bowl Group |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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