Correlation Between Primaris Retail and Greenfire Resources

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

By analyzing existing cross correlation between Primaris Retail RE and Greenfire Resources, you can compare the effects of market volatilities on Primaris Retail and Greenfire Resources 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 Primaris Retail with a short position of Greenfire Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Primaris Retail and Greenfire Resources.

Diversification Opportunities for Primaris Retail and Greenfire Resources

-0.11

Correlation Coefficient

Primaris Retail  Greenfire Resources

Good diversification

The 3 months correlation between Primaris and Greenfire is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Primaris Retail RE and Greenfire Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Greenfire Resources and Primaris Retail 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 Primaris Retail RE are associated (or correlated) with Greenfire Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Greenfire Resources has no effect on the direction of Primaris Retail i.e., Primaris Retail and Greenfire Resources go up and down completely randomly.

Pair Corralation between Primaris Retail and Greenfire Resources

Assuming the 90 days trading horizon Primaris Retail RE is expected to under-perform the Greenfire Resources. But the stock apears to be less risky and, when comparing its historical volatility, Primaris Retail RE is 2.15 times less risky than Greenfire Resources. The stock trades about -0.19 of its potential returns per unit of risk. The Greenfire Resources is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest  1,053  in Greenfire Resources on October 25, 2024 and sell it today you would lose (54.00) from holding Greenfire Resources or give up 5.13% of portfolio value over 90 days.

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

Primaris Retail RE  vs.  Greenfire Resources

Primaris Retail RE

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Primaris Retail RE has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Greenfire Resources

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Greenfire Resources are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Greenfire Resources is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Primaris Retail and Greenfire Resources

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

The idea behind Primaris Retail RE and Greenfire Resources 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.