Correlation Between StarTek and CSP
Can any of the company-specific risk be diversified away by investing in both StarTek and CSP 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 StarTek and CSP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between StarTek and CSP Inc, you can compare the effects of market volatilities on StarTek and CSP 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 StarTek with a short position of CSP. Check out your portfolio center. Please also check ongoing floating volatility patterns of StarTek and CSP.
Diversification Opportunities for StarTek and CSP
Average diversification
The 3 months correlation between StarTek and CSP is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding StarTek and CSP Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CSP Inc and StarTek 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 StarTek are associated (or correlated) with CSP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CSP Inc has no effect on the direction of StarTek i.e., StarTek and CSP go up and down completely randomly.
Pair Corralation between StarTek and CSP
Considering the 90-day investment horizon StarTek is expected to generate 0.82 times more return on investment than CSP. However, StarTek is 1.22 times less risky than CSP. It trades about 0.21 of its potential returns per unit of risk. CSP Inc is currently generating about 0.08 per unit of risk. If you would invest 284.00 in StarTek on August 28, 2024 and sell it today you would earn a total of 38.00 from holding StarTek or generate 13.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 3.95% |
| Values | Daily Returns |
StarTek vs. CSP Inc
Performance |
| Timeline |
| StarTek |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| CSP Inc |
StarTek and CSP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with StarTek and CSP
The main advantage of trading using opposite StarTek and CSP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if StarTek position performs unexpectedly, CSP 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 CSP will offset losses from the drop in CSP's long position.The idea behind StarTek and CSP Inc pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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