Correlation Between Star Diamond and ASX
Can any of the company-specific risk be diversified away by investing in both Star Diamond and ASX 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 Star Diamond and ASX into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Star Diamond and ASX LTD UNSPONSADR, you can compare the effects of market volatilities on Star Diamond and ASX 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 Star Diamond with a short position of ASX. Check out your portfolio center. Please also check ongoing floating volatility patterns of Star Diamond and ASX.
Diversification Opportunities for Star Diamond and ASX
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Star and ASX is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Star Diamond and ASX LTD UNSPONSADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ASX LTD UNSPONSADR and Star Diamond 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 Star Diamond are associated (or correlated) with ASX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ASX LTD UNSPONSADR has no effect on the direction of Star Diamond i.e., Star Diamond and ASX go up and down completely randomly.
Pair Corralation between Star Diamond and ASX
Assuming the 90 days horizon Star Diamond is expected to generate 1.28 times less return on investment than ASX. In addition to that, Star Diamond is 7.01 times more volatile than ASX LTD UNSPONSADR. It trades about 0.0 of its total potential returns per unit of risk. ASX LTD UNSPONSADR is currently generating about 0.04 per unit of volatility. If you would invest 3,449 in ASX LTD UNSPONSADR on August 31, 2024 and sell it today you would earn a total of 591.00 from holding ASX LTD UNSPONSADR or generate 17.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.74% |
| Values | Daily Returns |
Star Diamond vs. ASX LTD UNSPONSADR
Performance |
| Timeline |
| Star Diamond |
| ASX LTD UNSPONSADR |
Star Diamond and ASX Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Star Diamond and ASX
The main advantage of trading using opposite Star Diamond and ASX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Star Diamond position performs unexpectedly, ASX 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 ASX will offset losses from the drop in ASX's long position.| Star Diamond vs. InterContinental Hotels Group | Star Diamond vs. Virtus Investment Partners | Star Diamond vs. WILLIS LEASE FIN | Star Diamond vs. MELIA HOTELS |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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