Correlation Between STARLUX Airlines and Century Iron
Can any of the company-specific risk be diversified away by investing in both STARLUX Airlines and Century Iron 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 STARLUX Airlines and Century Iron into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between STARLUX Airlines Co and Century Iron And, you can compare the effects of market volatilities on STARLUX Airlines and Century Iron 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 STARLUX Airlines with a short position of Century Iron. Check out your portfolio center. Please also check ongoing floating volatility patterns of STARLUX Airlines and Century Iron.
Diversification Opportunities for STARLUX Airlines and Century Iron
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between STARLUX and Century is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding STARLUX Airlines Co and Century Iron And in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Century Iron And and STARLUX Airlines 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 STARLUX Airlines Co are associated (or correlated) with Century Iron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Century Iron And has no effect on the direction of STARLUX Airlines i.e., STARLUX Airlines and Century Iron go up and down completely randomly.
Pair Corralation between STARLUX Airlines and Century Iron
Assuming the 90 days trading horizon STARLUX Airlines Co is expected to generate 0.42 times more return on investment than Century Iron. However, STARLUX Airlines Co is 2.39 times less risky than Century Iron. It trades about -0.13 of its potential returns per unit of risk. Century Iron And is currently generating about -0.25 per unit of risk. If you would invest 2,865 in STARLUX Airlines Co on August 30, 2024 and sell it today you would lose (85.00) from holding STARLUX Airlines Co or give up 2.97% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
STARLUX Airlines Co vs. Century Iron And
Performance |
| Timeline |
| STARLUX Airlines |
| Century Iron And |
STARLUX Airlines and Century Iron Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with STARLUX Airlines and Century Iron
The main advantage of trading using opposite STARLUX Airlines and Century Iron positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if STARLUX Airlines position performs unexpectedly, Century Iron 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 Century Iron will offset losses from the drop in Century Iron's long position.| STARLUX Airlines vs. Acelon Chemicals Fiber | STARLUX Airlines vs. Quintain Steel Co | STARLUX Airlines vs. Feng Hsin Steel | STARLUX Airlines vs. FarGlory Hotel Co |
| Century Iron vs. Hsin Kuang Steel | Century Iron vs. Chung Hung Steel | Century Iron vs. Novatek Microelectronics Corp |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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