Correlation Between Stelar Metals and Acrow
Can any of the company-specific risk be diversified away by investing in both Stelar Metals and Acrow 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 Stelar Metals and Acrow into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stelar Metals and Acrow Limited, you can compare the effects of market volatilities on Stelar Metals and Acrow 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 Stelar Metals with a short position of Acrow. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stelar Metals and Acrow.
Diversification Opportunities for Stelar Metals and Acrow
-0.52 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Stelar and Acrow is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Stelar Metals and Acrow Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acrow Limited and Stelar Metals 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 Stelar Metals are associated (or correlated) with Acrow. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Acrow Limited has no effect on the direction of Stelar Metals i.e., Stelar Metals and Acrow go up and down completely randomly.
Pair Corralation between Stelar Metals and Acrow
Assuming the 90 days trading horizon Stelar Metals is expected to under-perform the Acrow. In addition to that, Stelar Metals is 2.73 times more volatile than Acrow Limited. It trades about -0.04 of its total potential returns per unit of risk. Acrow Limited is currently generating about 0.07 per unit of volatility. If you would invest 70.00 in Acrow Limited on September 12, 2024 and sell it today you would earn a total of 38.00 from holding Acrow Limited or generate 54.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stelar Metals vs. Acrow Limited
Performance |
| Timeline |
| Stelar Metals |
| Acrow Limited |
Stelar Metals and Acrow Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stelar Metals and Acrow
The main advantage of trading using opposite Stelar Metals and Acrow positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stelar Metals position performs unexpectedly, Acrow 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 Acrow will offset losses from the drop in Acrow's long position.| Stelar Metals vs. Perseus Mining | Stelar Metals vs. Bailador Technology Invest | Stelar Metals vs. Black Rock Mining | Stelar Metals vs. Aristocrat Leisure |
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 CEOs Directory module to screen CEOs from public companies around the world.
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