Correlation Between Star Media and Press Metal
Can any of the company-specific risk be diversified away by investing in both Star Media and Press Metal 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 Press Metal 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 Press Metal Bhd, you can compare the effects of market volatilities on Star Media and Press Metal 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 Press Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Star Media and Press Metal.
Diversification Opportunities for Star Media and Press Metal
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Star and Press is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Star Media Group and Press Metal Bhd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Press Metal 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 Press Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Press Metal Bhd has no effect on the direction of Star Media i.e., Star Media and Press Metal go up and down completely randomly.
Pair Corralation between Star Media and Press Metal
Assuming the 90 days trading horizon Star Media Group is expected to generate 0.79 times more return on investment than Press Metal. However, Star Media Group is 1.27 times less risky than Press Metal. It trades about 0.01 of its potential returns per unit of risk. Press Metal Bhd is currently generating about -0.03 per unit of risk. If you would invest 41.00 in Star Media Group on August 26, 2024 and sell it today you would earn a total of 0.00 from holding Star Media Group or generate 0.0% 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. Press Metal Bhd
Performance |
| Timeline |
| Star Media Group |
| Press Metal Bhd |
Star Media and Press Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Star Media and Press Metal
The main advantage of trading using opposite Star Media and Press Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Star Media position performs unexpectedly, Press Metal 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 Press Metal will offset losses from the drop in Press Metal's long position.| Star Media vs. Press Metal Bhd | Star Media vs. Riverview Rubber Estates | Star Media vs. Sapura Industrial Bhd | Star Media vs. CB Industrial Product |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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