Correlation Between Star Petroleum and SCI Electric
Can any of the company-specific risk be diversified away by investing in both Star Petroleum and SCI Electric 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 SCI Electric 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 SCI Electric Public, you can compare the effects of market volatilities on Star Petroleum and SCI Electric 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 SCI Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of Star Petroleum and SCI Electric.
Diversification Opportunities for Star Petroleum and SCI Electric
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Star and SCI is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Star Petroleum Refining and SCI Electric Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SCI Electric 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 SCI Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SCI Electric Public has no effect on the direction of Star Petroleum i.e., Star Petroleum and SCI Electric go up and down completely randomly.
Pair Corralation between Star Petroleum and SCI Electric
Assuming the 90 days trading horizon Star Petroleum Refining is expected to under-perform the SCI Electric. But the stock apears to be less risky and, when comparing its historical volatility, Star Petroleum Refining is 22.4 times less risky than SCI Electric. The stock trades about -0.04 of its potential returns per unit of risk. The SCI Electric Public is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 138.00 in SCI Electric Public on August 26, 2024 and sell it today you would lose (58.00) from holding SCI Electric Public or give up 42.03% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Star Petroleum Refining vs. SCI Electric Public
Performance |
| Timeline |
| Star Petroleum Refining |
| SCI Electric Public |
Star Petroleum and SCI Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Star Petroleum and SCI Electric
The main advantage of trading using opposite Star Petroleum and SCI Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Star Petroleum position performs unexpectedly, SCI Electric 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 SCI Electric will offset losses from the drop in SCI Electric'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 |
| SCI Electric vs. Star Petroleum Refining | SCI Electric vs. Siri Prime Office | SCI Electric vs. SC Asset | SCI Electric vs. Solartron Public |
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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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