Correlation Between Prime Media and Liberty Flour

Can any of the company-specific risk be diversified away by investing in both Prime Media and Liberty Flour 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 Liberty Flour 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 Liberty Flour Mills, you can compare the effects of market volatilities on Prime Media and Liberty Flour 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 Liberty Flour. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prime Media and Liberty Flour.

Diversification Opportunities for Prime Media and Liberty Flour

0.0

Correlation Coefficient

Prime Media  Liberty Flour

Pay attention - limited upside

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

Pair Corralation between Prime Media and Liberty Flour

If you would invest  188.00  in Prime Media Holdings on October 10, 2024 and sell it today you would earn a total of  21.00  from holding Prime Media Holdings or generate 11.17% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Prime Media Holdings  vs.  Liberty Flour Mills

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 uncertain 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.

Liberty Flour Mills

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Liberty Flour Mills has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Liberty Flour is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Prime Media and Liberty Flour

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

The idea behind Prime Media Holdings and Liberty Flour Mills 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 Anywhere module to track or share privately all of your investments from the convenience of any device.