Correlation Between Prime Media and Keepers Holdings

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

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

Diversification Opportunities for Prime Media and Keepers Holdings

0.23

Correlation Coefficient

Prime Media  Keepers Holdings

Modest diversification

The 3 months correlation between Prime and Keepers is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Prime Media Holdings and Keepers Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Keepers Holdings and Prime 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 Prime Media Holdings are associated (or correlated) with Keepers Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Keepers Holdings has no effect on the direction of Prime Media i.e., Prime Media and Keepers Holdings go up and down completely randomly.

Pair Corralation between Prime Media and Keepers Holdings

Assuming the 90 days trading horizon Prime Media Holdings is expected to under-perform the Keepers Holdings. In addition to that, Prime Media is 2.23 times more volatile than Keepers Holdings. It trades about -0.16 of its total potential returns per unit of risk. Keepers Holdings is currently generating about 0.06 per unit of volatility. If you would invest  200.00  in Keepers Holdings on September 14, 2024 and sell it today you would earn a total of  10.00  from holding Keepers Holdings or generate 5.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	93.65%
Values	Daily Returns

Prime Media Holdings  vs.  Keepers Holdings

Prime Media Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Prime Media Holdings 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 basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Keepers Holdings

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Keepers Holdings are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable technical and fundamental indicators, Keepers Holdings is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Prime Media and Keepers Holdings

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

The idea behind Prime Media Holdings and Keepers Holdings 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.