Correlation Between Huntsman Exploration and South Star
Can any of the company-specific risk be diversified away by investing in both Huntsman Exploration and South Star 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 Huntsman Exploration and South Star into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Huntsman Exploration and South Star Battery, you can compare the effects of market volatilities on Huntsman Exploration and South Star 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 Huntsman Exploration with a short position of South Star. Check out your portfolio center. Please also check ongoing floating volatility patterns of Huntsman Exploration and South Star.
Diversification Opportunities for Huntsman Exploration and South Star
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Huntsman and South is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Huntsman Exploration and South Star Battery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on South Star Battery and Huntsman Exploration 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 Huntsman Exploration are associated (or correlated) with South Star. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of South Star Battery has no effect on the direction of Huntsman Exploration i.e., Huntsman Exploration and South Star go up and down completely randomly.
Pair Corralation between Huntsman Exploration and South Star
Assuming the 90 days horizon Huntsman Exploration is expected to under-perform the South Star. In addition to that, Huntsman Exploration is 2.55 times more volatile than South Star Battery. It trades about -0.21 of its total potential returns per unit of risk. South Star Battery is currently generating about -0.09 per unit of volatility. If you would invest 44.00 in South Star Battery on August 29, 2024 and sell it today you would lose (5.00) from holding South Star Battery or give up 11.36% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Huntsman Exploration vs. South Star Battery
Performance |
| Timeline |
| Huntsman Exploration |
| South Star Battery |
Huntsman Exploration and South Star Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Huntsman Exploration and South Star
The main advantage of trading using opposite Huntsman Exploration and South Star positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Huntsman Exploration position performs unexpectedly, South Star 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 South Star will offset losses from the drop in South Star's long position.| Huntsman Exploration vs. Aurelia Metals Limited | Huntsman Exploration vs. Adriatic Metals PLC | Huntsman Exploration vs. American Helium | Huntsman Exploration vs. Progressive Planet Solutions |
| South Star vs. ZincX Resources Corp | South Star vs. Nuinsco Resources Limited | South Star vs. Qubec Nickel Corp | South Star vs. Rockridge Resources |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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