Correlation Between Starbucks and Silver Bear
Can any of the company-specific risk be diversified away by investing in both Starbucks and Silver Bear 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 Starbucks and Silver Bear into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Starbucks and Silver Bear Resources, you can compare the effects of market volatilities on Starbucks and Silver Bear 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 Starbucks with a short position of Silver Bear. Check out your portfolio center. Please also check ongoing floating volatility patterns of Starbucks and Silver Bear.
Diversification Opportunities for Starbucks and Silver Bear
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Starbucks and Silver is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Starbucks and Silver Bear Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Silver Bear Resources and Starbucks 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 Starbucks are associated (or correlated) with Silver Bear. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Silver Bear Resources has no effect on the direction of Starbucks i.e., Starbucks and Silver Bear go up and down completely randomly.
Pair Corralation between Starbucks and Silver Bear
If you would invest 9,261 in Starbucks on September 3, 2024 and sell it today you would earn a total of 985.00 from holding Starbucks or generate 10.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Starbucks vs. Silver Bear Resources
Performance |
| Timeline |
| Starbucks |
| Silver Bear Resources |
Starbucks and Silver Bear Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Starbucks and Silver Bear
The main advantage of trading using opposite Starbucks and Silver Bear positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Starbucks position performs unexpectedly, Silver Bear 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 Silver Bear will offset losses from the drop in Silver Bear's long position.| Starbucks vs. Highway Holdings Limited | Starbucks vs. QCR Holdings | Starbucks vs. Partner Communications | Starbucks vs. Acumen Pharmaceuticals |
| Silver Bear vs. Bel Fuse A | Silver Bear vs. Nextnav Acquisition Corp | Silver Bear vs. IPG Photonics | Silver Bear vs. Semtech |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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