Correlation Between Starco Brands and Select Energy
Can any of the company-specific risk be diversified away by investing in both Starco Brands and Select Energy 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 Starco Brands and Select Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Starco Brands and Select Energy Services, you can compare the effects of market volatilities on Starco Brands and Select Energy 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 Starco Brands with a short position of Select Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Starco Brands and Select Energy.
Diversification Opportunities for Starco Brands and Select Energy
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Starco and Select is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Starco Brands and Select Energy Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Select Energy Services and Starco Brands 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 Starco Brands are associated (or correlated) with Select Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Select Energy Services has no effect on the direction of Starco Brands i.e., Starco Brands and Select Energy go up and down completely randomly.
Pair Corralation between Starco Brands and Select Energy
Given the investment horizon of 90 days Starco Brands is expected to generate 1.52 times less return on investment than Select Energy. In addition to that, Starco Brands is 3.28 times more volatile than Select Energy Services. It trades about 0.02 of its total potential returns per unit of risk. Select Energy Services is currently generating about 0.08 per unit of volatility. If you would invest 765.00 in Select Energy Services on August 28, 2024 and sell it today you would earn a total of 681.00 from holding Select Energy Services or generate 89.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.72% |
| Values | Daily Returns |
Starco Brands vs. Select Energy Services
Performance |
| Timeline |
| Starco Brands |
| Select Energy Services |
Starco Brands and Select Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Starco Brands and Select Energy
The main advantage of trading using opposite Starco Brands and Select Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Starco Brands position performs unexpectedly, Select Energy 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 Select Energy will offset losses from the drop in Select Energy's long position.| Starco Brands vs. Select Energy Services | Starco Brands vs. Orion Engineered Carbons | Starco Brands vs. Element Solutions | Starco Brands vs. Kronos Worldwide |
| Select Energy vs. ProPetro Holding Corp | Select Energy vs. RPC Inc | Select Energy vs. MRC Global | Select Energy vs. Expro Group Holdings |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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