Correlation Between Star Petroleum and Sanko Diecasting
Can any of the company-specific risk be diversified away by investing in both Star Petroleum and Sanko Diecasting 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 Sanko Diecasting 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 Sanko Diecasting Public, you can compare the effects of market volatilities on Star Petroleum and Sanko Diecasting 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 Sanko Diecasting. Check out your portfolio center. Please also check ongoing floating volatility patterns of Star Petroleum and Sanko Diecasting.
Diversification Opportunities for Star Petroleum and Sanko Diecasting
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Star and Sanko is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Star Petroleum Refining and Sanko Diecasting Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sanko Diecasting 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 Sanko Diecasting. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sanko Diecasting Public has no effect on the direction of Star Petroleum i.e., Star Petroleum and Sanko Diecasting go up and down completely randomly.
Pair Corralation between Star Petroleum and Sanko Diecasting
Assuming the 90 days trading horizon Star Petroleum Refining is expected to under-perform the Sanko Diecasting. In addition to that, Star Petroleum is 2.21 times more volatile than Sanko Diecasting Public. It trades about -0.34 of its total potential returns per unit of risk. Sanko Diecasting Public is currently generating about -0.11 per unit of volatility. If you would invest 117.00 in Sanko Diecasting Public on November 5, 2024 and sell it today you would lose (3.00) from holding Sanko Diecasting Public or give up 2.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Star Petroleum Refining vs. Sanko Diecasting Public
Performance |
| Timeline |
| Star Petroleum Refining |
| Sanko Diecasting Public |
Star Petroleum and Sanko Diecasting Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Star Petroleum and Sanko Diecasting
The main advantage of trading using opposite Star Petroleum and Sanko Diecasting positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Star Petroleum position performs unexpectedly, Sanko Diecasting 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 Sanko Diecasting will offset losses from the drop in Sanko Diecasting's long position.| Star Petroleum vs. Thai Oil Public | Star Petroleum vs. IRPC Public | Star Petroleum vs. PTT Global Chemical | Star Petroleum vs. PTT Exploration and |
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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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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