Correlation Between Suntrust Home and Prime Media
Can any of the company-specific risk be diversified away by investing in both Suntrust Home and Prime Media 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 Suntrust Home and Prime Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Suntrust Home Developers and Prime Media Holdings, you can compare the effects of market volatilities on Suntrust Home and Prime Media 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 Suntrust Home with a short position of Prime Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Suntrust Home and Prime Media.
Diversification Opportunities for Suntrust Home and Prime Media
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Suntrust and Prime is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Suntrust Home Developers and Prime Media Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prime Media Holdings and Suntrust Home 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 Suntrust Home Developers are associated (or correlated) with Prime Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prime Media Holdings has no effect on the direction of Suntrust Home i.e., Suntrust Home and Prime Media go up and down completely randomly.
Pair Corralation between Suntrust Home and Prime Media
Assuming the 90 days trading horizon Suntrust Home Developers is expected to generate 0.67 times more return on investment than Prime Media. However, Suntrust Home Developers is 1.49 times less risky than Prime Media. It trades about 0.05 of its potential returns per unit of risk. Prime Media Holdings is currently generating about -0.12 per unit of risk. If you would invest 82.00 in Suntrust Home Developers on September 18, 2024 and sell it today you would earn a total of 4.00 from holding Suntrust Home Developers or generate 4.88% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 83.05% |
Values | Daily Returns |
Suntrust Home Developers vs. Prime Media Holdings
Performance |
Timeline |
Suntrust Home Developers |
Prime Media Holdings |
Suntrust Home and Prime Media Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Suntrust Home and Prime Media
The main advantage of trading using opposite Suntrust Home and Prime Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Suntrust Home position performs unexpectedly, Prime Media 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 Prime Media will offset losses from the drop in Prime Media's long position.Suntrust Home vs. Crown Asia Chemicals | Suntrust Home vs. Semirara Mining Corp | Suntrust Home vs. Philex Mining Corp | Suntrust Home vs. Asia United Bank |
Prime Media vs. Asia United Bank | Prime Media vs. Suntrust Home Developers | Prime Media vs. Jollibee Foods Corp | Prime Media vs. Philippine Business Bank |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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