Correlation Between Fundamental Global and Star Equity
Can any of the company-specific risk be diversified away by investing in both Fundamental Global and Star Equity 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 Fundamental Global and Star Equity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fundamental Global and Star Equity Holdings, you can compare the effects of market volatilities on Fundamental Global and Star Equity 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 Fundamental Global with a short position of Star Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fundamental Global and Star Equity.
Diversification Opportunities for Fundamental Global and Star Equity
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Fundamental and Star is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Fundamental Global and Star Equity Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Star Equity Holdings and Fundamental Global 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 Fundamental Global are associated (or correlated) with Star Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Star Equity Holdings has no effect on the direction of Fundamental Global i.e., Fundamental Global and Star Equity go up and down completely randomly.
Pair Corralation between Fundamental Global and Star Equity
Assuming the 90 days horizon Fundamental Global is expected to generate 5.05 times more return on investment than Star Equity. However, Fundamental Global is 5.05 times more volatile than Star Equity Holdings. It trades about 0.17 of its potential returns per unit of risk. Star Equity Holdings is currently generating about 0.04 per unit of risk. If you would invest 1,500 in Fundamental Global on August 28, 2024 and sell it today you would earn a total of 239.00 from holding Fundamental Global or generate 15.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Fundamental Global vs. Star Equity Holdings
Performance |
| Timeline |
| Fundamental Global |
| Star Equity Holdings |
Fundamental Global and Star Equity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fundamental Global and Star Equity
The main advantage of trading using opposite Fundamental Global and Star Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fundamental Global position performs unexpectedly, Star Equity 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 Equity will offset losses from the drop in Star Equity's long position.| Fundamental Global vs. FAT Brands | Fundamental Global vs. Fortress Biotech Pref | Fundamental Global vs. Fulton Financial |
| Star Equity vs. Star Equity Holdings | Star Equity vs. XOMA Corp | Star Equity vs. Fundamental Global | Star Equity vs. Fortress Biotech Pref |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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