Correlation Between Scotch Creek and Star Alliance
Can any of the company-specific risk be diversified away by investing in both Scotch Creek and Star Alliance 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 Scotch Creek and Star Alliance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Scotch Creek Ventures and Star Alliance International, you can compare the effects of market volatilities on Scotch Creek and Star Alliance 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 Scotch Creek with a short position of Star Alliance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scotch Creek and Star Alliance.
Diversification Opportunities for Scotch Creek and Star Alliance
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Scotch and Star is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Scotch Creek Ventures and Star Alliance International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Star Alliance Intern and Scotch Creek 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 Scotch Creek Ventures are associated (or correlated) with Star Alliance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Star Alliance Intern has no effect on the direction of Scotch Creek i.e., Scotch Creek and Star Alliance go up and down completely randomly.
Pair Corralation between Scotch Creek and Star Alliance
Assuming the 90 days horizon Scotch Creek is expected to generate 1.61 times less return on investment than Star Alliance. But when comparing it to its historical volatility, Scotch Creek Ventures is 1.28 times less risky than Star Alliance. It trades about 0.02 of its potential returns per unit of risk. Star Alliance International is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 1.80 in Star Alliance International on November 19, 2024 and sell it today you would lose (1.77) from holding Star Alliance International or give up 98.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Scotch Creek Ventures vs. Star Alliance International
Performance |
| Timeline |
| Scotch Creek Ventures |
| Star Alliance Intern |
Scotch Creek and Star Alliance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Scotch Creek and Star Alliance
The main advantage of trading using opposite Scotch Creek and Star Alliance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scotch Creek position performs unexpectedly, Star Alliance 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 Alliance will offset losses from the drop in Star Alliance's long position.| Scotch Creek vs. Alpha Copper Corp | Scotch Creek vs. American Rare Earths | Scotch Creek vs. Placer Creek Mining | Scotch Creek vs. Ameriwest Lithium |
| Star Alliance vs. Vior Inc | Star Alliance vs. Norsemont Mining | Star Alliance vs. Big Ridge Gold | Star Alliance vs. Cerrado Gold |
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 Stocks Directory module to find actively traded stocks across global markets.
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