Correlation Between Star Fashion and Cheer Holding
Can any of the company-specific risk be diversified away by investing in both Star Fashion and Cheer Holding 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 Fashion and Cheer Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Star Fashion Culture and Cheer Holding, you can compare the effects of market volatilities on Star Fashion and Cheer Holding 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 Fashion with a short position of Cheer Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Star Fashion and Cheer Holding.
Diversification Opportunities for Star Fashion and Cheer Holding
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Star and Cheer is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Star Fashion Culture and Cheer Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cheer Holding and Star Fashion 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 Fashion Culture are associated (or correlated) with Cheer Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cheer Holding has no effect on the direction of Star Fashion i.e., Star Fashion and Cheer Holding go up and down completely randomly.
Pair Corralation between Star Fashion and Cheer Holding
Given the investment horizon of 90 days Star Fashion Culture is expected to generate 2.03 times more return on investment than Cheer Holding. However, Star Fashion is 2.03 times more volatile than Cheer Holding. It trades about 0.29 of its potential returns per unit of risk. Cheer Holding is currently generating about -0.39 per unit of risk. If you would invest 362.00 in Star Fashion Culture on August 24, 2024 and sell it today you would earn a total of 92.00 from holding Star Fashion Culture or generate 25.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Star Fashion Culture vs. Cheer Holding
Performance |
| Timeline |
| Star Fashion Culture |
| Cheer Holding |
Star Fashion and Cheer Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Star Fashion and Cheer Holding
The main advantage of trading using opposite Star Fashion and Cheer Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Star Fashion position performs unexpectedly, Cheer Holding 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 Cheer Holding will offset losses from the drop in Cheer Holding's long position.| Star Fashion vs. Ziff Davis | Star Fashion vs. Steel Connect | Star Fashion vs. Cardlytics | Star Fashion vs. Thumzup Media |
| Cheer Holding vs. First Ship Lease | Cheer Holding vs. Tarsus Pharmaceuticals | Cheer Holding vs. Inhibrx | Cheer Holding vs. Abcellera Biologics |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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