Correlation Between Primoris Services and Gannett

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

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

Diversification Opportunities for Primoris Services and Gannett

-0.06

Correlation Coefficient

Primoris Services  Gannett

Good diversification

The 3 months correlation between Primoris and Gannett is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Primoris Services and Gannett Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gannett and Primoris Services 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 Primoris Services are associated (or correlated) with Gannett. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gannett has no effect on the direction of Primoris Services i.e., Primoris Services and Gannett go up and down completely randomly.

Pair Corralation between Primoris Services and Gannett

Given the investment horizon of 90 days Primoris Services is expected to generate 0.91 times more return on investment than Gannett. However, Primoris Services is 1.1 times less risky than Gannett. It trades about 0.23 of its potential returns per unit of risk. Gannett Co is currently generating about -0.11 per unit of risk. If you would invest  8,019  in Primoris Services on October 24, 2024 and sell it today you would earn a total of  778.00  from holding Primoris Services or generate 9.7% return on investment over 90 days.

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

Primoris Services  vs.  Gannett Co

Primoris Services

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Primoris Services are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of very fragile forward indicators, Primoris Services displayed solid returns over the last few months and may actually be approaching a breakup point.

Gannett

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Gannett Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unfluctuating performance, the Stock's fundamental indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Pair Trading with Primoris Services and Gannett

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

The idea behind Primoris Services and Gannett Co 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 Commodity Directory module to find actively traded commodities issued by global exchanges.