Correlation Between STI Education and Premiere Entertainment

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

By analyzing existing cross correlation between STI Education Systems and Premiere Entertainment, you can compare the effects of market volatilities on STI Education and Premiere Entertainment 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 STI Education with a short position of Premiere Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of STI Education and Premiere Entertainment.

Diversification Opportunities for STI Education and Premiere Entertainment

-0.69

Correlation Coefficient

STI Education  Premiere Entertainment

Excellent diversification

The 3 months correlation between STI and Premiere is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding STI Education Systems and Premiere Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Premiere Entertainment and STI Education 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 STI Education Systems are associated (or correlated) with Premiere Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Premiere Entertainment has no effect on the direction of STI Education i.e., STI Education and Premiere Entertainment go up and down completely randomly.

Pair Corralation between STI Education and Premiere Entertainment

Assuming the 90 days trading horizon STI Education Systems is expected to generate 0.71 times more return on investment than Premiere Entertainment. However, STI Education Systems is 1.41 times less risky than Premiere Entertainment. It trades about 0.14 of its potential returns per unit of risk. Premiere Entertainment is currently generating about -0.03 per unit of risk. If you would invest  30.00  in STI Education Systems on October 25, 2024 and sell it today you would earn a total of  110.00  from holding STI Education Systems or generate 366.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	99.37%
Values	Daily Returns

STI Education Systems  vs.  Premiere Entertainment

STI Education Systems

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in STI Education Systems are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak technical and fundamental indicators, STI Education exhibited solid returns over the last few months and may actually be approaching a breakup point.

Premiere Entertainment

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Premiere Entertainment has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with STI Education and Premiere Entertainment

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

The idea behind STI Education Systems and Premiere Entertainment 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.