Correlation Between ISign Media and Primaris Retail

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

By analyzing existing cross correlation between iSign Media Solutions and Primaris Retail RE, you can compare the effects of market volatilities on ISign Media and Primaris Retail 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 ISign Media with a short position of Primaris Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of ISign Media and Primaris Retail.

Diversification Opportunities for ISign Media and Primaris Retail

0.07

Correlation Coefficient

ISign Media  Primaris Retail

Significant diversification

The 3 months correlation between ISign and Primaris is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding iSign Media Solutions and Primaris Retail RE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Primaris Retail RE and ISign 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 iSign Media Solutions are associated (or correlated) with Primaris Retail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Primaris Retail RE has no effect on the direction of ISign Media i.e., ISign Media and Primaris Retail go up and down completely randomly.

Pair Corralation between ISign Media and Primaris Retail

Assuming the 90 days horizon ISign Media is expected to generate 12.3 times less return on investment than Primaris Retail. But when comparing it to its historical volatility, iSign Media Solutions is 1.38 times less risky than Primaris Retail. It trades about 0.01 of its potential returns per unit of risk. Primaris Retail RE is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  1,487  in Primaris Retail RE on September 2, 2024 and sell it today you would earn a total of  125.00  from holding Primaris Retail RE or generate 8.41% return on investment over 90 days.

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

iSign Media Solutions  vs.  Primaris Retail RE

iSign Media Solutions

Risk-Adjusted Performance

1 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in iSign Media Solutions are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, ISign Media is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Primaris Retail RE

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Primaris Retail RE are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain basic indicators, Primaris Retail may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with ISign Media and Primaris Retail

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

The idea behind iSign Media Solutions and Primaris Retail RE 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.

Check out your portfolio center.

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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.