Correlation Between Sea and Star Holdings
Can any of the company-specific risk be diversified away by investing in both Sea and Star Holdings 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 Sea and Star Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sea and Star Holdings, you can compare the effects of market volatilities on Sea and Star Holdings 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 Sea with a short position of Star Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sea and Star Holdings.
Diversification Opportunities for Sea and Star Holdings
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Sea and Star is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Sea and Star Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Star Holdings and Sea 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 Sea are associated (or correlated) with Star Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Star Holdings has no effect on the direction of Sea i.e., Sea and Star Holdings go up and down completely randomly.
Pair Corralation between Sea and Star Holdings
Allowing for the 90-day total investment horizon Sea is expected to generate 1.38 times more return on investment than Star Holdings. However, Sea is 1.38 times more volatile than Star Holdings. It trades about 0.06 of its potential returns per unit of risk. Star Holdings is currently generating about -0.05 per unit of risk. If you would invest 5,023 in Sea on September 12, 2024 and sell it today you would earn a total of 6,182 from holding Sea or generate 123.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 87.07% |
| Values | Daily Returns |
Sea vs. Star Holdings
Performance |
| Timeline |
| Sea |
| Star Holdings |
Sea and Star Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sea and Star Holdings
The main advantage of trading using opposite Sea and Star Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sea position performs unexpectedly, Star Holdings 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 Holdings will offset losses from the drop in Star Holdings' long position.The idea behind Sea and Star Holdings pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Star Holdings vs. New England Realty | Star Holdings vs. Frp Holdings Ord | Star Holdings vs. Marcus Millichap | Star Holdings vs. Transcontinental Realty Investors |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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