Correlation Between Premier Products and A1

Can any of the company-specific risk be diversified away by investing in both Premier Products and A1 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 Products and A1 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Premier Products Group and A1 Group, you can compare the effects of market volatilities on Premier Products and A1 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 Products with a short position of A1. Check out your portfolio center. Please also check ongoing floating volatility patterns of Premier Products and A1.

Diversification Opportunities for Premier Products and A1

0.0

Correlation Coefficient

Premier Products  A1

Pay attention - limited upside

The 3 months correlation between Premier and A1 is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Premier Products Group and A1 Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on A1 Group and Premier Products 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 Products Group are associated (or correlated) with A1. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of A1 Group has no effect on the direction of Premier Products i.e., Premier Products and A1 go up and down completely randomly.

Pair Corralation between Premier Products and A1

If you would invest  0.01  in Premier Products Group on September 18, 2024 and sell it today you would earn a total of  0.00  from holding Premier Products Group or generate 0.0% return on investment over 90 days.

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

Premier Products Group  vs.  A1 Group

Premier Products

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Premier Products Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Premier Products is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

A1 Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days A1 Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic 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 Products and A1

The main advantage of trading using opposite Premier Products and A1 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Premier Products position performs unexpectedly, A1 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 A1 will offset losses from the drop in A1's long position.

The idea behind Premier Products Group and A1 Group 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.