Correlation Between Star Fashion and Nexxen International
Can any of the company-specific risk be diversified away by investing in both Star Fashion and Nexxen International 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 Nexxen International 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 Nexxen International, you can compare the effects of market volatilities on Star Fashion and Nexxen International 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 Nexxen International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Star Fashion and Nexxen International.
Diversification Opportunities for Star Fashion and Nexxen International
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Star and Nexxen is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Star Fashion Culture and Nexxen International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nexxen International 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 Nexxen International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nexxen International has no effect on the direction of Star Fashion i.e., Star Fashion and Nexxen International go up and down completely randomly.
Pair Corralation between Star Fashion and Nexxen International
Given the investment horizon of 90 days Star Fashion Culture is expected to generate 2.4 times more return on investment than Nexxen International. However, Star Fashion is 2.4 times more volatile than Nexxen International. It trades about 0.1 of its potential returns per unit of risk. Nexxen International is currently generating about 0.13 per unit of risk. If you would invest 400.00 in Star Fashion Culture on August 27, 2024 and sell it today you would earn a total of 72.00 from holding Star Fashion Culture or generate 18.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 17.55% |
| Values | Daily Returns |
Star Fashion Culture vs. Nexxen International
Performance |
| Timeline |
| Star Fashion Culture |
| Nexxen International |
Star Fashion and Nexxen International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Star Fashion and Nexxen International
The main advantage of trading using opposite Star Fashion and Nexxen International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Star Fashion position performs unexpectedly, Nexxen International 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 Nexxen International will offset losses from the drop in Nexxen International's long position.| Star Fashion vs. WiMi Hologram Cloud | Star Fashion vs. National CineMedia | Star Fashion vs. Baosheng Media Group | Star Fashion vs. Aquagold International |
| Nexxen International vs. Cardinal Health | Nexxen International vs. Genuine Parts Co | Nexxen International vs. Merit Medical Systems | Nexxen International vs. The Joint Corp |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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