Correlation Between Stelar Metals and Ras Technology
Can any of the company-specific risk be diversified away by investing in both Stelar Metals and Ras Technology 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 Ras Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stelar Metals and Ras Technology Holdings, you can compare the effects of market volatilities on Stelar Metals and Ras Technology 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 Ras Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stelar Metals and Ras Technology.
Diversification Opportunities for Stelar Metals and Ras Technology
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Stelar and Ras is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Stelar Metals and Ras Technology Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ras Technology Holdings 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 Ras Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ras Technology Holdings has no effect on the direction of Stelar Metals i.e., Stelar Metals and Ras Technology go up and down completely randomly.
Pair Corralation between Stelar Metals and Ras Technology
Assuming the 90 days trading horizon Stelar Metals is expected to generate 1.67 times more return on investment than Ras Technology. However, Stelar Metals is 1.67 times more volatile than Ras Technology Holdings. It trades about 0.01 of its potential returns per unit of risk. Ras Technology Holdings is currently generating about -0.04 per unit of risk. If you would invest 7.20 in Stelar Metals on September 2, 2024 and sell it today you would lose (0.60) from holding Stelar Metals or give up 8.33% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Stelar Metals vs. Ras Technology Holdings
Performance |
| Timeline |
| Stelar Metals |
| Ras Technology Holdings |
Stelar Metals and Ras Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stelar Metals and Ras Technology
The main advantage of trading using opposite Stelar Metals and Ras Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stelar Metals position performs unexpectedly, Ras Technology 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 Ras Technology will offset losses from the drop in Ras Technology'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 |
| Ras Technology vs. Aneka Tambang Tbk | Ras Technology vs. Unibail Rodamco Westfield SE | Ras Technology vs. Macquarie Group | Ras Technology vs. Commonwealth 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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