Correlation Between STAR AFRICA and Cass Saddle
Can any of the company-specific risk be diversified away by investing in both STAR AFRICA and Cass Saddle 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 AFRICA and Cass Saddle into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between STAR AFRICA PORATION and Cass Saddle Agriculture, you can compare the effects of market volatilities on STAR AFRICA and Cass Saddle 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 AFRICA with a short position of Cass Saddle. Check out your portfolio center. Please also check ongoing floating volatility patterns of STAR AFRICA and Cass Saddle.
Diversification Opportunities for STAR AFRICA and Cass Saddle
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between STAR and Cass is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding STAR AFRICA PORATION and Cass Saddle Agriculture in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cass Saddle Agriculture and STAR AFRICA 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 AFRICA PORATION are associated (or correlated) with Cass Saddle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cass Saddle Agriculture has no effect on the direction of STAR AFRICA i.e., STAR AFRICA and Cass Saddle go up and down completely randomly.
Pair Corralation between STAR AFRICA and Cass Saddle
If you would invest 220.00 in STAR AFRICA PORATION on November 6, 2024 and sell it today you would earn a total of 30.00 from holding STAR AFRICA PORATION or generate 13.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
STAR AFRICA PORATION vs. Cass Saddle Agriculture
Performance |
| Timeline |
| STAR AFRICA PORATION |
| Cass Saddle Agriculture |
STAR AFRICA and Cass Saddle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with STAR AFRICA and Cass Saddle
The main advantage of trading using opposite STAR AFRICA and Cass Saddle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if STAR AFRICA position performs unexpectedly, Cass Saddle 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 Cass Saddle will offset losses from the drop in Cass Saddle's long position.| STAR AFRICA vs. CAFCA LIMITED | STAR AFRICA vs. FIRST MUTUAL PROPERTIES | STAR AFRICA vs. AFRICAN DISTILLERS LIMITED | STAR AFRICA vs. TANGANDA TEA PANY |
| Cass Saddle vs. STAR AFRICA PORATION | Cass Saddle vs. CAFCA LIMITED | Cass Saddle vs. FIRST MUTUAL PROPERTIES | Cass Saddle vs. AFRICAN DISTILLERS LIMITED |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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