Correlation Between Star Petroleum and Prima Marine
Can any of the company-specific risk be diversified away by investing in both Star Petroleum and Prima Marine 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 Star Petroleum and Prima Marine into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Star Petroleum Refining and Prima Marine Public, you can compare the effects of market volatilities on Star Petroleum and Prima Marine 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 Star Petroleum with a short position of Prima Marine. Check out your portfolio center. Please also check ongoing floating volatility patterns of Star Petroleum and Prima Marine.
Diversification Opportunities for Star Petroleum and Prima Marine
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Star and Prima is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Star Petroleum Refining and Prima Marine Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prima Marine Public and Star Petroleum 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 Star Petroleum Refining are associated (or correlated) with Prima Marine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prima Marine Public has no effect on the direction of Star Petroleum i.e., Star Petroleum and Prima Marine go up and down completely randomly.
Pair Corralation between Star Petroleum and Prima Marine
Assuming the 90 days trading horizon Star Petroleum Refining is expected to under-perform the Prima Marine. In addition to that, Star Petroleum is 1.22 times more volatile than Prima Marine Public. It trades about -0.02 of its total potential returns per unit of risk. Prima Marine Public is currently generating about 0.15 per unit of volatility. If you would invest 497.00 in Prima Marine Public on August 24, 2024 and sell it today you would earn a total of 373.00 from holding Prima Marine Public or generate 75.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.59% |
| Values | Daily Returns |
Star Petroleum Refining vs. Prima Marine Public
Performance |
| Timeline |
| Star Petroleum Refining |
| Prima Marine Public |
Star Petroleum and Prima Marine Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Star Petroleum and Prima Marine
The main advantage of trading using opposite Star Petroleum and Prima Marine positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Star Petroleum position performs unexpectedly, Prima Marine 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 Prima Marine will offset losses from the drop in Prima Marine's long position.| Star Petroleum vs. IRPC Public | Star Petroleum vs. PTT Oil and | Star Petroleum vs. Power Solution Technologies | Star Petroleum vs. Prima Marine Public |
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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.
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