Correlation Between NBCUNIVERSAL and Primoris Services

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

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

Diversification Opportunities for NBCUNIVERSAL and Primoris Services

0.19

Correlation Coefficient

NBCUNIVERSAL  Primoris Services

Average diversification

The 3 months correlation between NBCUNIVERSAL and Primoris is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding NBCUNIVERSAL MEDIA LLC and Primoris Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Primoris Services and NBCUNIVERSAL 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 NBCUNIVERSAL MEDIA LLC are associated (or correlated) with Primoris Services. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Primoris Services has no effect on the direction of NBCUNIVERSAL i.e., NBCUNIVERSAL and Primoris Services go up and down completely randomly.

Pair Corralation between NBCUNIVERSAL and Primoris Services

Assuming the 90 days trading horizon NBCUNIVERSAL MEDIA LLC is expected to generate 0.32 times more return on investment than Primoris Services. However, NBCUNIVERSAL MEDIA LLC is 3.16 times less risky than Primoris Services. It trades about 0.08 of its potential returns per unit of risk. Primoris Services is currently generating about -0.1 per unit of risk. If you would invest  10,154  in NBCUNIVERSAL MEDIA LLC on December 27, 2024 and sell it today you would earn a total of  345.00  from holding NBCUNIVERSAL MEDIA LLC or generate 3.4% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	55.74%
Values	Daily Returns

NBCUNIVERSAL MEDIA LLC  vs.  Primoris Services

NBCUNIVERSAL MEDIA LLC

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in NBCUNIVERSAL MEDIA LLC are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain basic indicators, NBCUNIVERSAL may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Primoris Services

Risk-Adjusted Performance

Very Weak

Over the last 90 days Primoris Services has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's forward indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with NBCUNIVERSAL and Primoris Services

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

The idea behind NBCUNIVERSAL MEDIA LLC and Primoris 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.

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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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..