Correlation Between Premier Marketing and Eastern Technical

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

By analyzing existing cross correlation between Premier Marketing Public and Eastern Technical Engineering, you can compare the effects of market volatilities on Premier Marketing and Eastern Technical 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 Premier Marketing with a short position of Eastern Technical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Premier Marketing and Eastern Technical.

Diversification Opportunities for Premier Marketing and Eastern Technical

-0.78

Correlation Coefficient

Premier Marketing  Eastern Technical

Pay attention - limited upside

The 3 months correlation between Premier and Eastern is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Premier Marketing Public and Eastern Technical Engineering in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eastern Technical and Premier Marketing 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 Premier Marketing Public are associated (or correlated) with Eastern Technical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eastern Technical has no effect on the direction of Premier Marketing i.e., Premier Marketing and Eastern Technical go up and down completely randomly.

Pair Corralation between Premier Marketing and Eastern Technical

Assuming the 90 days horizon Premier Marketing Public is expected to generate 0.98 times more return on investment than Eastern Technical. However, Premier Marketing Public is 1.02 times less risky than Eastern Technical. It trades about 0.1 of its potential returns per unit of risk. Eastern Technical Engineering is currently generating about -0.17 per unit of risk. If you would invest  825.00  in Premier Marketing Public on September 12, 2024 and sell it today you would earn a total of  85.00  from holding Premier Marketing Public or generate 10.3% return on investment over 90 days.

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

Premier Marketing Public  vs.  Eastern Technical Engineering

Premier Marketing Public

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Premier Marketing Public are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting fundamental drivers, Premier Marketing may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Eastern Technical

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Eastern Technical Engineering has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's technical and fundamental indicators remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Premier Marketing and Eastern Technical

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

The idea behind Premier Marketing Public and Eastern Technical Engineering 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.