Correlation Between 500 and Stars
Can any of the company-specific risk be diversified away by investing in both 500 and Stars 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 500 and Stars into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between 500 and The Stars Group, you can compare the effects of market volatilities on 500 and Stars 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 500 with a short position of Stars. Check out your portfolio center. Please also check ongoing floating volatility patterns of 500 and Stars.
Diversification Opportunities for 500 and Stars
Pay attention - limited upside
The 3 months correlation between 500 and Stars is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding 500 and The Stars Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stars Group and 500 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 500 are associated (or correlated) with Stars. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stars Group has no effect on the direction of 500 i.e., 500 and Stars go up and down completely randomly.
Pair Corralation between 500 and Stars
If you would invest (100.00) in The Stars Group on January 21, 2024 and sell it today you would earn a total of 100.00 from holding The Stars Group or generate -100.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
500 vs. The Stars Group
Performance |
| Timeline |
| 500 |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Stars Group |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
500 and Stars Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 500 and Stars
The main advantage of trading using opposite 500 and Stars positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 500 position performs unexpectedly, Stars 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 Stars will offset losses from the drop in Stars' long position.The idea behind 500 and The Stars Group 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.| Stars vs. Upper Street Marketing | Stars vs. Drilling Tools International | Stars vs. AKITA Drilling | Stars vs. Tradeweb Markets |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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