Correlation Between Workspace Group and Premier African

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

By analyzing existing cross correlation between Workspace Group PLC and Premier African Minerals, you can compare the effects of market volatilities on Workspace Group and Premier African 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 Workspace Group with a short position of Premier African. Check out your portfolio center. Please also check ongoing floating volatility patterns of Workspace Group and Premier African.

Diversification Opportunities for Workspace Group and Premier African

0.0

Correlation Coefficient

Workspace Group  Premier African

Pay attention - limited upside

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

Pair Corralation between Workspace Group and Premier African

Assuming the 90 days trading horizon Workspace Group PLC is expected to generate 0.18 times more return on investment than Premier African. However, Workspace Group PLC is 5.65 times less risky than Premier African. It trades about -0.05 of its potential returns per unit of risk. Premier African Minerals is currently generating about -0.02 per unit of risk. If you would invest  55,967  in Workspace Group PLC on September 24, 2024 and sell it today you would lose (6,217) from holding Workspace Group PLC or give up 11.11% of portfolio value over 90 days.

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

Workspace Group PLC  vs.  Premier African Minerals

Workspace Group PLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Workspace Group PLC 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 technical and fundamental indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Premier African Minerals

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Premier African Minerals are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Premier African unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Workspace Group and Premier African

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

The idea behind Workspace Group PLC and Premier African Minerals 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.