Correlation Between Stelar Metals and Prime Financial
Can any of the company-specific risk be diversified away by investing in both Stelar Metals and Prime Financial 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 Prime Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stelar Metals and Prime Financial Group, you can compare the effects of market volatilities on Stelar Metals and Prime Financial 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 Prime Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stelar Metals and Prime Financial.
Diversification Opportunities for Stelar Metals and Prime Financial
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Stelar and Prime is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Stelar Metals and Prime Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prime Financial Group 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 Prime Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prime Financial Group has no effect on the direction of Stelar Metals i.e., Stelar Metals and Prime Financial go up and down completely randomly.
Pair Corralation between Stelar Metals and Prime Financial
Assuming the 90 days trading horizon Stelar Metals is expected to under-perform the Prime Financial. In addition to that, Stelar Metals is 1.3 times more volatile than Prime Financial Group. It trades about -0.29 of its total potential returns per unit of risk. Prime Financial Group is currently generating about 0.01 per unit of volatility. If you would invest 23.00 in Prime Financial Group on August 29, 2024 and sell it today you would earn a total of 0.00 from holding Prime Financial Group or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stelar Metals vs. Prime Financial Group
Performance |
| Timeline |
| Stelar Metals |
| Prime Financial Group |
Stelar Metals and Prime Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stelar Metals and Prime Financial
The main advantage of trading using opposite Stelar Metals and Prime Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stelar Metals position performs unexpectedly, Prime Financial 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 Prime Financial will offset losses from the drop in Prime Financial's long position.| Stelar Metals vs. Northern Star Resources | Stelar Metals vs. Evolution Mining | Stelar Metals vs. Bluescope Steel | Stelar Metals vs. Sandfire Resources NL |
| Prime Financial vs. TPG Telecom | Prime Financial vs. Singular Health Group | Prime Financial vs. Kingsrose Mining | Prime Financial vs. Fisher Paykel Healthcare |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon |