Correlation Between Premier Health and Dynacor Gold

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

By analyzing existing cross correlation between Premier Health of and Dynacor Gold Mines, you can compare the effects of market volatilities on Premier Health and Dynacor Gold 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 Health with a short position of Dynacor Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Premier Health and Dynacor Gold.

Diversification Opportunities for Premier Health and Dynacor Gold

-0.29

Correlation Coefficient

Premier Health  Dynacor Gold

Very good diversification

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

Pair Corralation between Premier Health and Dynacor Gold

Assuming the 90 days horizon Premier Health of is expected to generate 4.82 times more return on investment than Dynacor Gold. However, Premier Health is 4.82 times more volatile than Dynacor Gold Mines. It trades about 0.07 of its potential returns per unit of risk. Dynacor Gold Mines is currently generating about -0.07 per unit of risk. If you would invest  14.00  in Premier Health of on December 2, 2024 and sell it today you would earn a total of  2.00  from holding Premier Health of or generate 14.29% return on investment over 90 days.

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

Premier Health of  vs.  Dynacor Gold Mines

Premier Health

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Premier Health of are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Premier Health showed solid returns over the last few months and may actually be approaching a breakup point.

Dynacor Gold Mines

Risk-Adjusted Performance

Very Weak

Over the last 90 days Dynacor Gold Mines has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's technical and fundamental indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Premier Health and Dynacor Gold

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

The idea behind Premier Health of and Dynacor Gold Mines 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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.