Correlation Between Prime Media and BRNPB

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

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

Diversification Opportunities for Prime Media and BRNPB

-0.44

Correlation Coefficient

Prime Media  BRNPB

Very good diversification

The 3 months correlation between Prime and BRNPB is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Prime Media Holdings and BRNPB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BRNPB and Prime Media 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 Prime Media Holdings are associated (or correlated) with BRNPB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BRNPB has no effect on the direction of Prime Media i.e., Prime Media and BRNPB go up and down completely randomly.

Pair Corralation between Prime Media and BRNPB

Assuming the 90 days trading horizon Prime Media Holdings is expected to under-perform the BRNPB. In addition to that, Prime Media is 1.99 times more volatile than BRNPB. It trades about -0.08 of its total potential returns per unit of risk. BRNPB is currently generating about -0.13 per unit of volatility. If you would invest  10,750  in BRNPB on October 24, 2024 and sell it today you would lose (650.00) from holding BRNPB or give up 6.05% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	33.33%
Values	Daily Returns

Prime Media Holdings  vs.  BRNPB

Prime Media Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Prime Media Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

BRNPB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days BRNPB has generated negative risk-adjusted returns adding no value to investors with long positions. Even with unsteady performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in February 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Prime Media and BRNPB

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

The idea behind Prime Media Holdings and BRNPB 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.