Correlation Between Stelar Metals and Kina Securities
Can any of the company-specific risk be diversified away by investing in both Stelar Metals and Kina Securities 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 Kina Securities into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stelar Metals and Kina Securities, you can compare the effects of market volatilities on Stelar Metals and Kina Securities 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 Kina Securities. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stelar Metals and Kina Securities.
Diversification Opportunities for Stelar Metals and Kina Securities
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Stelar and Kina is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Stelar Metals and Kina Securities in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kina Securities 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 Kina Securities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kina Securities has no effect on the direction of Stelar Metals i.e., Stelar Metals and Kina Securities go up and down completely randomly.
Pair Corralation between Stelar Metals and Kina Securities
Assuming the 90 days trading horizon Stelar Metals is expected to under-perform the Kina Securities. In addition to that, Stelar Metals is 1.48 times more volatile than Kina Securities. It trades about -0.03 of its total potential returns per unit of risk. Kina Securities is currently generating about 0.07 per unit of volatility. If you would invest 113.00 in Kina Securities on November 28, 2024 and sell it today you would earn a total of 2.00 from holding Kina Securities or generate 1.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Stelar Metals vs. Kina Securities
Performance |
| Timeline |
| Stelar Metals |
| Kina Securities |
Stelar Metals and Kina Securities Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stelar Metals and Kina Securities
The main advantage of trading using opposite Stelar Metals and Kina Securities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stelar Metals position performs unexpectedly, Kina Securities 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 Kina Securities will offset losses from the drop in Kina Securities' long position.| Stelar Metals vs. Step One Clothing | Stelar Metals vs. Aussie Broadband | Stelar Metals vs. Hutchison Telecommunications | Stelar Metals vs. Collins Foods |
| Kina Securities vs. Spirit Telecom | Kina Securities vs. Australian Unity Office | Kina Securities vs. Queste Communications | Kina Securities vs. National Australia Bank |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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