Correlation Between Prime Media and Alliance Select

Can any of the company-specific risk be diversified away by investing in both Prime Media and Alliance Select 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 Alliance Select 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 Alliance Select Foods, you can compare the effects of market volatilities on Prime Media and Alliance Select 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 Alliance Select. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prime Media and Alliance Select.

Diversification Opportunities for Prime Media and Alliance Select

-0.06

Correlation Coefficient

Prime Media  Alliance Select

Good diversification

The 3 months correlation between Prime and Alliance is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Prime Media Holdings and Alliance Select Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Alliance Select Foods 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 Alliance Select. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Alliance Select Foods has no effect on the direction of Prime Media i.e., Prime Media and Alliance Select go up and down completely randomly.

Pair Corralation between Prime Media and Alliance Select

Assuming the 90 days trading horizon Prime Media Holdings is expected to generate 1.17 times more return on investment than Alliance Select. However, Prime Media is 1.17 times more volatile than Alliance Select Foods. It trades about -0.05 of its potential returns per unit of risk. Alliance Select Foods is currently generating about -0.07 per unit of risk. If you would invest  179.00  in Prime Media Holdings on April 20, 2025 and sell it today you would lose (29.00) from holding Prime Media Holdings or give up 16.2% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	56.67%
Values	Daily Returns

Prime Media Holdings  vs.  Alliance Select Foods

Prime Media Holdings

Risk-Adjusted Performance

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 uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in August 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Alliance Select Foods

Risk-Adjusted Performance

Very Weak

Over the last 90 days Alliance Select Foods 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 August 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Prime Media and Alliance Select

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

The idea behind Prime Media Holdings and Alliance Select Foods 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.