Correlation Between Premier and Intelsat
Can any of the company-specific risk be diversified away by investing in both Premier and Intelsat 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 and Intelsat into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Premier and Intelsat SA, you can compare the effects of market volatilities on Premier and Intelsat 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 with a short position of Intelsat. Check out your portfolio center. Please also check ongoing floating volatility patterns of Premier and Intelsat.
Diversification Opportunities for Premier and Intelsat
Pay attention - limited upside
The 3 months correlation between Premier and Intelsat is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Premier and Intelsat SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intelsat SA and Premier 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 are associated (or correlated) with Intelsat. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intelsat SA has no effect on the direction of Premier i.e., Premier and Intelsat go up and down completely randomly.
Pair Corralation between Premier and Intelsat
If you would invest (100.00) in Intelsat SA on January 25, 2024 and sell it today you would earn a total of 100.00 from holding Intelsat SA or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Premier vs. Intelsat SA
Performance |
| Timeline |
| Premier |
| Intelsat SA |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Premier and Intelsat Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Premier and Intelsat
The main advantage of trading using opposite Premier and Intelsat positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Premier position performs unexpectedly, Intelsat 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 Intelsat will offset losses from the drop in Intelsat's long position.The idea behind Premier and Intelsat SA 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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