Correlation Between Clime Investment and Star Entertainment
Can any of the company-specific risk be diversified away by investing in both Clime Investment and Star Entertainment 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 Clime Investment and Star Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Clime Investment Management and Star Entertainment Group, you can compare the effects of market volatilities on Clime Investment and Star Entertainment 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 Clime Investment with a short position of Star Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Clime Investment and Star Entertainment.
Diversification Opportunities for Clime Investment and Star Entertainment
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Clime and Star is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Clime Investment Management and Star Entertainment Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Star Entertainment and Clime Investment 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 Clime Investment Management are associated (or correlated) with Star Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Star Entertainment has no effect on the direction of Clime Investment i.e., Clime Investment and Star Entertainment go up and down completely randomly.
Pair Corralation between Clime Investment and Star Entertainment
Assuming the 90 days trading horizon Clime Investment Management is expected to generate 0.4 times more return on investment than Star Entertainment. However, Clime Investment Management is 2.51 times less risky than Star Entertainment. It trades about 0.04 of its potential returns per unit of risk. Star Entertainment Group is currently generating about -0.08 per unit of risk. If you would invest 32.00 in Clime Investment Management on October 12, 2024 and sell it today you would earn a total of 4.00 from holding Clime Investment Management or generate 12.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Clime Investment Management vs. Star Entertainment Group
Performance |
| Timeline |
| Clime Investment Man |
| Star Entertainment |
Clime Investment and Star Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Clime Investment and Star Entertainment
The main advantage of trading using opposite Clime Investment and Star Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Clime Investment position performs unexpectedly, Star Entertainment 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 Entertainment will offset losses from the drop in Star Entertainment's long position.| Clime Investment vs. K2 Asset Management | Clime Investment vs. FireFly Metals | Clime Investment vs. Stelar Metals | Clime Investment vs. Microequities Asset Management |
| Star Entertainment vs. Clime Investment Management | Star Entertainment vs. Apiam Animal Health | Star Entertainment vs. Austco Healthcare | Star Entertainment vs. Sonic Healthcare |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
Other Complementary Tools
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity |