Correlation Between Star Fashion and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Star Fashion and Dow Jones 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 Dow Jones 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 Dow Jones Industrial, you can compare the effects of market volatilities on Star Fashion and Dow Jones 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 Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Star Fashion and Dow Jones.
Diversification Opportunities for Star Fashion and Dow Jones
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Star and Dow is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Star Fashion Culture and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial 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 Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of Star Fashion i.e., Star Fashion and Dow Jones go up and down completely randomly.
Pair Corralation between Star Fashion and Dow Jones
Given the investment horizon of 90 days Star Fashion Culture is expected to generate 3.91 times more return on investment than Dow Jones. However, Star Fashion is 3.91 times more volatile than Dow Jones Industrial. It trades about 0.29 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.15 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. Dow Jones Industrial
Performance |
| Timeline |
Star Fashion and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Star Fashion Culture
Pair trading matchups for Star Fashion
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Star Fashion and Dow Jones
The main advantage of trading using opposite Star Fashion and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Star Fashion position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| Star Fashion vs. Emerson Radio | Star Fashion vs. Playtika Holding Corp | Star Fashion vs. Academy Sports Outdoors | Star Fashion vs. Marine Products |
| Dow Jones vs. Sphere Entertainment Co | Dow Jones vs. Perseus Mining Limited | Dow Jones vs. Titan Machinery | Dow Jones vs. Simon Property Group |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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