Correlation Between PREMIER FOODS and DELCATH SYS

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

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

Diversification Opportunities for PREMIER FOODS and DELCATH SYS

-0.25

Correlation Coefficient

PREMIER FOODS  DELCATH SYS

Very good diversification

The 3 months correlation between PREMIER and DELCATH is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding PREMIER FOODS and DELCATH SYS NEW in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DELCATH SYS NEW and PREMIER FOODS 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 FOODS are associated (or correlated) with DELCATH SYS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DELCATH SYS NEW has no effect on the direction of PREMIER FOODS i.e., PREMIER FOODS and DELCATH SYS go up and down completely randomly.

Pair Corralation between PREMIER FOODS and DELCATH SYS

Assuming the 90 days trading horizon PREMIER FOODS is expected to generate 3.68 times less return on investment than DELCATH SYS. But when comparing it to its historical volatility, PREMIER FOODS is 4.28 times less risky than DELCATH SYS. It trades about 0.09 of its potential returns per unit of risk. DELCATH SYS NEW is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  338.00  in DELCATH SYS NEW on October 26, 2024 and sell it today you would earn a total of  1,212  from holding DELCATH SYS NEW or generate 358.58% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

PREMIER FOODS  vs.  DELCATH SYS NEW

PREMIER FOODS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PREMIER FOODS has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, PREMIER FOODS is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

DELCATH SYS NEW

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in DELCATH SYS NEW are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, DELCATH SYS reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with PREMIER FOODS and DELCATH SYS

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

The idea behind PREMIER FOODS and DELCATH SYS NEW 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.