Correlation Between AuraSource and Star Bulk

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Can any of the company-specific risk be diversified away by investing in both AuraSource and Star Bulk 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 AuraSource and Star Bulk into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AuraSource and Star Bulk Carriers, you can compare the effects of market volatilities on AuraSource and Star Bulk 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 AuraSource with a short position of Star Bulk. Check out your portfolio center. Please also check ongoing floating volatility patterns of AuraSource and Star Bulk.

Diversification Opportunities for AuraSource and Star Bulk

0.76
  Correlation Coefficient

Poor diversification

The 3 months correlation between AuraSource and Star is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding AuraSource and Star Bulk Carriers in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Star Bulk Carriers and AuraSource 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 AuraSource are associated (or correlated) with Star Bulk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Star Bulk Carriers has no effect on the direction of AuraSource i.e., AuraSource and Star Bulk go up and down completely randomly.

Pair Corralation between AuraSource and Star Bulk

If you would invest  1,486  in Star Bulk Carriers on November 9, 2024 and sell it today you would earn a total of  55.00  from holding Star Bulk Carriers or generate 3.7% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy95.24%
ValuesDaily Returns

AuraSource  vs.  Star Bulk Carriers

 Performance 
       Timeline  
AuraSource 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days AuraSource has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in March 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.
Star Bulk Carriers 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Star Bulk Carriers has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's essential indicators remain quite persistent which may send shares a bit higher in March 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

AuraSource and Star Bulk Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with AuraSource and Star Bulk

The main advantage of trading using opposite AuraSource and Star Bulk positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AuraSource position performs unexpectedly, Star Bulk 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 Star Bulk will offset losses from the drop in Star Bulk's long position.
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The idea behind AuraSource and Star Bulk Carriers 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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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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..

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