Correlation Between Medibank Private and Star Entertainment
Can any of the company-specific risk be diversified away by investing in both Medibank Private 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 Medibank Private and Star Entertainment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Medibank Private and Star Entertainment Group, you can compare the effects of market volatilities on Medibank Private 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 Medibank Private with a short position of Star Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Medibank Private and Star Entertainment.
Diversification Opportunities for Medibank Private and Star Entertainment
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Medibank and Star is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Medibank Private and Star Entertainment Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Star Entertainment and Medibank Private 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 Medibank Private 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 Medibank Private i.e., Medibank Private and Star Entertainment go up and down completely randomly.
Pair Corralation between Medibank Private and Star Entertainment
Assuming the 90 days trading horizon Medibank Private is expected to generate 0.07 times more return on investment than Star Entertainment. However, Medibank Private is 14.85 times less risky than Star Entertainment. It trades about 0.11 of its potential returns per unit of risk. Star Entertainment Group is currently generating about -0.19 per unit of risk. If you would invest 378.00 in Medibank Private on October 12, 2024 and sell it today you would earn a total of 5.00 from holding Medibank Private or generate 1.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Medibank Private vs. Star Entertainment Group
Performance |
| Timeline |
| Medibank Private |
| Star Entertainment |
Medibank Private and Star Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Medibank Private and Star Entertainment
The main advantage of trading using opposite Medibank Private and Star Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Medibank Private 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.| Medibank Private vs. Centaurus Metals | Medibank Private vs. Phoslock Environmental Technologies | Medibank Private vs. Australian Strategic Materials | Medibank Private vs. Sky Metals |
| Star Entertainment vs. Medibank Private | Star Entertainment vs. Westpac Banking | Star Entertainment vs. Commonwealth Bank of | Star Entertainment vs. Event Hospitality and |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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