Correlation Between Prestige Brand and SSIC Old

Can any of the company-specific risk be diversified away by investing in both Prestige Brand and SSIC Old 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 Prestige Brand and SSIC Old into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for Prestige Brand and SSIC Old

0.0

Correlation Coefficient

Prestige Brand  SSIC Old

Pay attention - limited upside

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

Pair Corralation between Prestige Brand and SSIC Old

If you would invest  8,499  in Prestige Brand Holdings on December 1, 2024 and sell it today you would lose (24.00) from holding Prestige Brand Holdings or give up 0.28% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Prestige Brand Holdings  vs.  SSIC Old

Prestige Brand Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Prestige Brand Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong fundamental drivers, Prestige Brand is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

SSIC Old

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Prestige Brand and SSIC Old

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

The idea behind Prestige Brand Holdings and SSIC Old 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..