Correlation Between Star Entertainment and Talisman Mining
Can any of the company-specific risk be diversified away by investing in both Star Entertainment and Talisman Mining 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 Entertainment and Talisman Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Star Entertainment Group and Talisman Mining, you can compare the effects of market volatilities on Star Entertainment and Talisman Mining 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 Entertainment with a short position of Talisman Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Star Entertainment and Talisman Mining.
Diversification Opportunities for Star Entertainment and Talisman Mining
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Star and Talisman is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Star Entertainment Group and Talisman Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Talisman Mining and Star Entertainment 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 Entertainment Group are associated (or correlated) with Talisman Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Talisman Mining has no effect on the direction of Star Entertainment i.e., Star Entertainment and Talisman Mining go up and down completely randomly.
Pair Corralation between Star Entertainment and Talisman Mining
Assuming the 90 days trading horizon Star Entertainment Group is expected to under-perform the Talisman Mining. In addition to that, Star Entertainment is 2.35 times more volatile than Talisman Mining. It trades about -0.19 of its total potential returns per unit of risk. Talisman Mining is currently generating about -0.16 per unit of volatility. If you would invest 24.00 in Talisman Mining on October 12, 2024 and sell it today you would lose (3.00) from holding Talisman Mining or give up 12.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Star Entertainment Group vs. Talisman Mining
Performance |
| Timeline |
| Star Entertainment |
| Talisman Mining |
Star Entertainment and Talisman Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Star Entertainment and Talisman Mining
The main advantage of trading using opposite Star Entertainment and Talisman Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Star Entertainment position performs unexpectedly, Talisman Mining 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 Talisman Mining will offset losses from the drop in Talisman Mining's long position.| Star Entertainment vs. Clime Investment Management | Star Entertainment vs. Apiam Animal Health | Star Entertainment vs. Austco Healthcare | Star Entertainment vs. Sonic Healthcare |
| Talisman Mining vs. Pioneer Credit | Talisman Mining vs. Macquarie Bank Limited | Talisman Mining vs. Balkan Mining and | Talisman Mining vs. IDP Education |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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