Correlation Between Scepter Holdings and Star Jets
Can any of the company-specific risk be diversified away by investing in both Scepter Holdings and Star Jets 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 Scepter Holdings and Star Jets into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Scepter Holdings and Star Jets International, you can compare the effects of market volatilities on Scepter Holdings and Star Jets 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 Scepter Holdings with a short position of Star Jets. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scepter Holdings and Star Jets.
Diversification Opportunities for Scepter Holdings and Star Jets
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Scepter and Star is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Scepter Holdings and Star Jets International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Star Jets International and Scepter Holdings 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 Scepter Holdings are associated (or correlated) with Star Jets. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Star Jets International has no effect on the direction of Scepter Holdings i.e., Scepter Holdings and Star Jets go up and down completely randomly.
Pair Corralation between Scepter Holdings and Star Jets
Given the investment horizon of 90 days Scepter Holdings is expected to generate 22.8 times less return on investment than Star Jets. In addition to that, Scepter Holdings is 1.17 times more volatile than Star Jets International. It trades about 0.01 of its total potential returns per unit of risk. Star Jets International is currently generating about 0.29 per unit of volatility. If you would invest 0.70 in Star Jets International on September 1, 2024 and sell it today you would earn a total of 1.17 from holding Star Jets International or generate 167.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Scepter Holdings vs. Star Jets International
Performance |
| Timeline |
| Scepter Holdings |
| Star Jets International |
Scepter Holdings and Star Jets Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Scepter Holdings and Star Jets
The main advantage of trading using opposite Scepter Holdings and Star Jets positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scepter Holdings position performs unexpectedly, Star Jets 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 Jets will offset losses from the drop in Star Jets' long position.| Scepter Holdings vs. The A2 Milk | Scepter Holdings vs. Altavoz Entertainment | Scepter Holdings vs. Artisan Consumer Goods | Scepter Holdings vs. General Mills |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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