Correlation Between NYSE Composite and Star Equity
Can any of the company-specific risk be diversified away by investing in both NYSE Composite 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 NYSE Composite and Star Equity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NYSE Composite and Star Equity Holdings, you can compare the effects of market volatilities on NYSE Composite 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 NYSE Composite with a short position of Star Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of NYSE Composite and Star Equity.
Diversification Opportunities for NYSE Composite and Star Equity
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NYSE and Star is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding NYSE Composite 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 NYSE Composite 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 NYSE Composite 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 NYSE Composite i.e., NYSE Composite and Star Equity go up and down completely randomly.
Pair Corralation between NYSE Composite and Star Equity
Assuming the 90 days trading horizon NYSE Composite is expected to generate 0.34 times more return on investment than Star Equity. However, NYSE Composite is 2.94 times less risky than Star Equity. It trades about 0.11 of its potential returns per unit of risk. Star Equity Holdings is currently generating about 0.03 per unit of risk. If you would invest 1,583,553 in NYSE Composite on August 28, 2024 and sell it today you would earn a total of 438,483 from holding NYSE Composite or generate 27.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NYSE Composite vs. Star Equity Holdings
Performance |
| Timeline |
NYSE Composite and Star Equity Volatility Contrast
Predicted Return Density |
| Returns |
NYSE Composite
Pair trading matchups for NYSE Composite
Star Equity Holdings
Pair trading matchups for Star Equity
Pair Trading with NYSE Composite and Star Equity
The main advantage of trading using opposite NYSE Composite and Star Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NYSE Composite 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.| NYSE Composite vs. Vita Coco | NYSE Composite vs. Franklin Wireless Corp | NYSE Composite vs. Ambev SA ADR | NYSE Composite vs. Toro Co |
| 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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