Correlation Between Stelar Metals and Ambertech
Can any of the company-specific risk be diversified away by investing in both Stelar Metals and Ambertech 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 Ambertech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stelar Metals and Ambertech, you can compare the effects of market volatilities on Stelar Metals and Ambertech 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 Ambertech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stelar Metals and Ambertech.
Diversification Opportunities for Stelar Metals and Ambertech
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Stelar and Ambertech is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Stelar Metals and Ambertech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ambertech 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 Ambertech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ambertech has no effect on the direction of Stelar Metals i.e., Stelar Metals and Ambertech go up and down completely randomly.
Pair Corralation between Stelar Metals and Ambertech
Assuming the 90 days trading horizon Stelar Metals is expected to under-perform the Ambertech. In addition to that, Stelar Metals is 1.31 times more volatile than Ambertech. It trades about -0.03 of its total potential returns per unit of risk. Ambertech is currently generating about -0.01 per unit of volatility. If you would invest 28.00 in Ambertech on November 1, 2024 and sell it today you would lose (11.00) from holding Ambertech or give up 39.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stelar Metals vs. Ambertech
Performance |
| Timeline |
| Stelar Metals |
| Ambertech |
Stelar Metals and Ambertech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stelar Metals and Ambertech
The main advantage of trading using opposite Stelar Metals and Ambertech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stelar Metals position performs unexpectedly, Ambertech 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 Ambertech will offset losses from the drop in Ambertech's long position.| Stelar Metals vs. Nufarm Finance NZ | Stelar Metals vs. Collins Foods | Stelar Metals vs. Kip McGrath Education | Stelar Metals vs. Australian Agricultural |
| Ambertech vs. Aeon Metals | Ambertech vs. Change Financial Limited | Ambertech vs. Credit Clear | Ambertech vs. Stelar Metals |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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