Correlation Between MW Investment and Premier Financial

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

By analyzing existing cross correlation between MW Investment Holding and Premier Financial Corp, you can compare the effects of market volatilities on MW Investment and Premier Financial 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 MW Investment with a short position of Premier Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of MW Investment and Premier Financial.

Diversification Opportunities for MW Investment and Premier Financial

0.0

Correlation Coefficient

MW Investment  Premier Financial

Pay attention - limited upside

The 3 months correlation between MEGH and Premier is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding MW Investment Holding and Premier Financial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Premier Financial Corp and MW Investment 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 MW Investment Holding are associated (or correlated) with Premier Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Premier Financial Corp has no effect on the direction of MW Investment i.e., MW Investment and Premier Financial go up and down completely randomly.

Pair Corralation between MW Investment and Premier Financial

If you would invest  2,266  in Premier Financial Corp on October 9, 2024 and sell it today you would earn a total of  259.00  from holding Premier Financial Corp or generate 11.43% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	96.83%
Values	Daily Returns

MW Investment Holding  vs.  Premier Financial Corp

MW Investment Holding

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MW Investment Holding has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong technical and fundamental indicators, MW Investment is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Premier Financial Corp

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Premier Financial Corp are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile technical and fundamental indicators, Premier Financial exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with MW Investment and Premier Financial

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

The idea behind MW Investment Holding and Premier Financial Corp 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.