Correlation Between Allhome Corp and Prime Media

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

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

Diversification Opportunities for Allhome Corp and Prime Media

0.15

Correlation Coefficient

Allhome Corp  Prime Media

Average diversification

The 3 months correlation between Allhome and Prime is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Allhome Corp and Prime Media Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prime Media Holdings and Allhome Corp 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 Allhome Corp are associated (or correlated) with Prime Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prime Media Holdings has no effect on the direction of Allhome Corp i.e., Allhome Corp and Prime Media go up and down completely randomly.

Pair Corralation between Allhome Corp and Prime Media

Assuming the 90 days trading horizon Allhome Corp is expected to under-perform the Prime Media. But the stock apears to be less risky and, when comparing its historical volatility, Allhome Corp is 1.88 times less risky than Prime Media. The stock trades about -0.13 of its potential returns per unit of risk. The Prime Media Holdings is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  180.00  in Prime Media Holdings on November 29, 2024 and sell it today you would lose (8.00) from holding Prime Media Holdings or give up 4.44% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	94.83%
Values	Daily Returns

Allhome Corp  vs.  Prime Media Holdings

Allhome Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Allhome Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in March 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Prime Media Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Prime Media Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Prime Media is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Allhome Corp and Prime Media

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

The idea behind Allhome Corp and Prime Media 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.

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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.