Correlation Between Manhattan and Star Royalties
Can any of the company-specific risk be diversified away by investing in both Manhattan and Star Royalties 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 Manhattan and Star Royalties into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Manhattan Limited and Star Royalties, you can compare the effects of market volatilities on Manhattan and Star Royalties 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 Manhattan with a short position of Star Royalties. Check out your portfolio center. Please also check ongoing floating volatility patterns of Manhattan and Star Royalties.
Diversification Opportunities for Manhattan and Star Royalties
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Manhattan and Star is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Manhattan Limited and Star Royalties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Star Royalties and Manhattan 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 Manhattan Limited are associated (or correlated) with Star Royalties. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Star Royalties has no effect on the direction of Manhattan i.e., Manhattan and Star Royalties go up and down completely randomly.
Pair Corralation between Manhattan and Star Royalties
Assuming the 90 days horizon Manhattan Limited is expected to generate 7.95 times more return on investment than Star Royalties. However, Manhattan is 7.95 times more volatile than Star Royalties. It trades about 0.15 of its potential returns per unit of risk. Star Royalties is currently generating about 0.03 per unit of risk. If you would invest 0.19 in Manhattan Limited on November 2, 2024 and sell it today you would earn a total of 0.58 from holding Manhattan Limited or generate 305.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 65.05% |
| Values | Daily Returns |
Manhattan Limited vs. Star Royalties
Performance |
| Timeline |
| Manhattan Limited |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Good
| Star Royalties |
Manhattan and Star Royalties Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Manhattan and Star Royalties
The main advantage of trading using opposite Manhattan and Star Royalties positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Manhattan position performs unexpectedly, Star Royalties 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 Royalties will offset losses from the drop in Star Royalties' long position.| Manhattan vs. EnviroGold Global Limited | Manhattan vs. Gemfields Group Limited | Manhattan vs. Pacific Ridge Exploration | Manhattan vs. Star Royalties |
| Star Royalties vs. Gemfields Group Limited | Star Royalties vs. Defiance Silver Corp | Star Royalties vs. Diamond Fields Resources | Star Royalties vs. GoGold 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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