Correlation Between Premiere Entertainment and Integrated Micro

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

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

Diversification Opportunities for Premiere Entertainment and Integrated Micro

-0.11

Correlation Coefficient

Premiere Entertainment  Integrated Micro

Good diversification

The 3 months correlation between Premiere and Integrated is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Premiere Entertainment and Integrated Micro Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Integrated Micro Ele and Premiere Entertainment 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 Premiere Entertainment are associated (or correlated) with Integrated Micro. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Integrated Micro Ele has no effect on the direction of Premiere Entertainment i.e., Premiere Entertainment and Integrated Micro go up and down completely randomly.

Pair Corralation between Premiere Entertainment and Integrated Micro

Assuming the 90 days trading horizon Premiere Entertainment is expected to generate 1.36 times more return on investment than Integrated Micro. However, Premiere Entertainment is 1.36 times more volatile than Integrated Micro Electronics. It trades about 0.04 of its potential returns per unit of risk. Integrated Micro Electronics is currently generating about -0.07 per unit of risk. If you would invest  17.00  in Premiere Entertainment on September 5, 2024 and sell it today you would earn a total of  1.00  from holding Premiere Entertainment or generate 5.88% return on investment over 90 days.

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

Premiere Entertainment  vs.  Integrated Micro Electronics

Premiere Entertainment

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Premiere Entertainment are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Premiere Entertainment may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Integrated Micro Ele

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Integrated Micro Electronics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady 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 Premiere Entertainment and Integrated Micro

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

The idea behind Premiere Entertainment and Integrated Micro Electronics 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.