Correlation Between SCI Electric and Star Petroleum
Can any of the company-specific risk be diversified away by investing in both SCI Electric and Star Petroleum 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 SCI Electric and Star Petroleum into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SCI Electric Public and Star Petroleum Refining, you can compare the effects of market volatilities on SCI Electric and Star Petroleum 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 SCI Electric with a short position of Star Petroleum. Check out your portfolio center. Please also check ongoing floating volatility patterns of SCI Electric and Star Petroleum.
Diversification Opportunities for SCI Electric and Star Petroleum
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between SCI and Star is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding SCI Electric Public and Star Petroleum Refining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Star Petroleum Refining and SCI Electric 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 SCI Electric Public are associated (or correlated) with Star Petroleum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Star Petroleum Refining has no effect on the direction of SCI Electric i.e., SCI Electric and Star Petroleum go up and down completely randomly.
Pair Corralation between SCI Electric and Star Petroleum
Assuming the 90 days trading horizon SCI Electric Public is expected to under-perform the Star Petroleum. But the stock apears to be less risky and, when comparing its historical volatility, SCI Electric Public is 1.06 times less risky than Star Petroleum. The stock trades about -0.17 of its potential returns per unit of risk. The Star Petroleum Refining is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 655.00 in Star Petroleum Refining on August 26, 2024 and sell it today you would earn a total of 15.00 from holding Star Petroleum Refining or generate 2.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SCI Electric Public vs. Star Petroleum Refining
Performance |
| Timeline |
| SCI Electric Public |
| Star Petroleum Refining |
SCI Electric and Star Petroleum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SCI Electric and Star Petroleum
The main advantage of trading using opposite SCI Electric and Star Petroleum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SCI Electric position performs unexpectedly, Star Petroleum 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 Petroleum will offset losses from the drop in Star Petroleum's long position.| SCI Electric vs. Star Petroleum Refining | SCI Electric vs. Siri Prime Office | SCI Electric vs. SC Asset | SCI Electric vs. Solartron Public |
| Star Petroleum vs. Thai Oil Public | Star Petroleum vs. IRPC Public | Star Petroleum vs. PTT Global Chemical | Star Petroleum vs. PTT Exploration 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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