Correlation Between Primega Group and Shimmick Common

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

By analyzing existing cross correlation between Primega Group Holdings and Shimmick Common, you can compare the effects of market volatilities on Primega Group and Shimmick Common 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 Primega Group with a short position of Shimmick Common. Check out your portfolio center. Please also check ongoing floating volatility patterns of Primega Group and Shimmick Common.

Diversification Opportunities for Primega Group and Shimmick Common

-0.33

Correlation Coefficient

Primega Group  Shimmick Common

Very good diversification

The 3 months correlation between Primega and Shimmick is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Primega Group Holdings and Shimmick Common in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shimmick Common and Primega 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 Primega Group Holdings are associated (or correlated) with Shimmick Common. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shimmick Common has no effect on the direction of Primega Group i.e., Primega Group and Shimmick Common go up and down completely randomly.

Pair Corralation between Primega Group and Shimmick Common

Given the investment horizon of 90 days Primega Group Holdings is expected to generate 34.02 times more return on investment than Shimmick Common. However, Primega Group is 34.02 times more volatile than Shimmick Common. It trades about 0.19 of its potential returns per unit of risk. Shimmick Common is currently generating about 0.15 per unit of risk. If you would invest  1,018  in Primega Group Holdings on September 22, 2024 and sell it today you would lose (899.00) from holding Primega Group Holdings or give up 88.31% of portfolio value over 90 days.

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

Primega Group Holdings  vs.  Shimmick Common

Primega Group Holdings

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Primega Group Holdings are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite quite sluggish technical indicators, Primega Group disclosed solid returns over the last few months and may actually be approaching a breakup point.

Shimmick Common

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Shimmick Common has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy forward indicators, Shimmick Common is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Primega Group and Shimmick Common

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

The idea behind Primega Group Holdings and Shimmick Common 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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.