Correlation Between Star Media and TAS Offshore
Can any of the company-specific risk be diversified away by investing in both Star Media and TAS Offshore 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 Star Media and TAS Offshore into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Star Media Group and TAS Offshore Bhd, you can compare the effects of market volatilities on Star Media and TAS Offshore 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 Star Media with a short position of TAS Offshore. Check out your portfolio center. Please also check ongoing floating volatility patterns of Star Media and TAS Offshore.
Diversification Opportunities for Star Media and TAS Offshore
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Star and TAS is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Star Media Group and TAS Offshore Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TAS Offshore Bhd and Star 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 Star Media Group are associated (or correlated) with TAS Offshore. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TAS Offshore Bhd has no effect on the direction of Star Media i.e., Star Media and TAS Offshore go up and down completely randomly.
Pair Corralation between Star Media and TAS Offshore
Assuming the 90 days trading horizon Star Media is expected to generate 25.98 times less return on investment than TAS Offshore. But when comparing it to its historical volatility, Star Media Group is 1.25 times less risky than TAS Offshore. It trades about 0.01 of its potential returns per unit of risk. TAS Offshore Bhd is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 64.00 in TAS Offshore Bhd on October 25, 2024 and sell it today you would earn a total of 2.00 from holding TAS Offshore Bhd or generate 3.13% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Star Media Group vs. TAS Offshore Bhd
Performance |
Timeline |
Star Media Group |
TAS Offshore Bhd |
Star Media and TAS Offshore Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Star Media and TAS Offshore
The main advantage of trading using opposite Star Media and TAS Offshore positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Star Media position performs unexpectedly, TAS Offshore 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 TAS Offshore will offset losses from the drop in TAS Offshore's long position.Star Media vs. Media Prima Bhd | Star Media vs. Asia Media Group | Star Media vs. Advance Information Marketing |
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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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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