Correlation Between PREMIER FOODS and HM HENMAUUNSPADR

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

By analyzing existing cross correlation between PREMIER FOODS and HM HENMAUUNSPADR 15, you can compare the effects of market volatilities on PREMIER FOODS and HM HENMAUUNSPADR 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 HM HENMAUUNSPADR. Check out your portfolio center. Please also check ongoing floating volatility patterns of PREMIER FOODS and HM HENMAUUNSPADR.

Diversification Opportunities for PREMIER FOODS and HM HENMAUUNSPADR

-0.29

Correlation Coefficient

PREMIER FOODS  HM HENMAUUNSPADR

Very good diversification

The 3 months correlation between PREMIER and HMSA is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding PREMIER FOODS and HM HENMAUUNSPADR 15 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HM HENMAUUNSPADR 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 HM HENMAUUNSPADR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HM HENMAUUNSPADR has no effect on the direction of PREMIER FOODS i.e., PREMIER FOODS and HM HENMAUUNSPADR go up and down completely randomly.

Pair Corralation between PREMIER FOODS and HM HENMAUUNSPADR

Assuming the 90 days trading horizon PREMIER FOODS is expected to generate 0.65 times more return on investment than HM HENMAUUNSPADR. However, PREMIER FOODS is 1.54 times less risky than HM HENMAUUNSPADR. It trades about 0.09 of its potential returns per unit of risk. HM HENMAUUNSPADR 15 is currently generating about 0.02 per unit of risk. If you would invest  214.00  in PREMIER FOODS on September 13, 2024 and sell it today you would earn a total of  16.00  from holding PREMIER FOODS or generate 7.48% 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.  HM HENMAUUNSPADR 15

PREMIER FOODS

Risk-Adjusted Performance

6 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in PREMIER FOODS are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, PREMIER FOODS may actually be approaching a critical reversion point that can send shares even higher in January 2025.

HM HENMAUUNSPADR

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in HM HENMAUUNSPADR 15 are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, HM HENMAUUNSPADR is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with PREMIER FOODS and HM HENMAUUNSPADR

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

The idea behind PREMIER FOODS and HM HENMAUUNSPADR 15 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 Commodity Directory module to find actively traded commodities issued by global exchanges.