Correlation Between Premier Polyfilm and Datamatics Global

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

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

Diversification Opportunities for Premier Polyfilm and Datamatics Global

0.0

Correlation Coefficient

Premier Polyfilm  Datamatics Global

Pay attention - limited upside

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

Pair Corralation between Premier Polyfilm and Datamatics Global

Assuming the 90 days trading horizon Premier Polyfilm Limited is expected to generate 1.26 times more return on investment than Datamatics Global. However, Premier Polyfilm is 1.26 times more volatile than Datamatics Global Services. It trades about 0.33 of its potential returns per unit of risk. Datamatics Global Services is currently generating about 0.37 per unit of risk. If you would invest  5,925  in Premier Polyfilm Limited on September 24, 2024 and sell it today you would earn a total of  1,217  from holding Premier Polyfilm Limited or generate 20.54% return on investment over 90 days.

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

Premier Polyfilm Limited  vs.  Datamatics Global Services

Premier Polyfilm

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Premier Polyfilm Limited are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Even with relatively uncertain basic indicators, Premier Polyfilm reported solid returns over the last few months and may actually be approaching a breakup point.

Datamatics Global

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days Datamatics Global Services has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable forward indicators, Datamatics Global is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Premier Polyfilm and Datamatics Global

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

The idea behind Premier Polyfilm Limited and Datamatics Global Services 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.