Correlation Between Star Holdings and Cadence Design
Can any of the company-specific risk be diversified away by investing in both Star Holdings and Cadence Design 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 Holdings and Cadence Design into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Star Holdings and Cadence Design Systems, you can compare the effects of market volatilities on Star Holdings and Cadence Design 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 Holdings with a short position of Cadence Design. Check out your portfolio center. Please also check ongoing floating volatility patterns of Star Holdings and Cadence Design.
Diversification Opportunities for Star Holdings and Cadence Design
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Star and Cadence is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Star Holdings and Cadence Design Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cadence Design Systems and Star Holdings 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 Holdings are associated (or correlated) with Cadence Design. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cadence Design Systems has no effect on the direction of Star Holdings i.e., Star Holdings and Cadence Design go up and down completely randomly.
Pair Corralation between Star Holdings and Cadence Design
Given the investment horizon of 90 days Star Holdings is expected to generate 0.97 times more return on investment than Cadence Design. However, Star Holdings is 1.03 times less risky than Cadence Design. It trades about 0.0 of its potential returns per unit of risk. Cadence Design Systems is currently generating about -0.15 per unit of risk. If you would invest 933.00 in Star Holdings on November 30, 2024 and sell it today you would lose (8.00) from holding Star Holdings or give up 0.86% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Star Holdings vs. Cadence Design Systems
Performance |
| Timeline |
| Star Holdings |
| Cadence Design Systems |
Star Holdings and Cadence Design Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Star Holdings and Cadence Design
The main advantage of trading using opposite Star Holdings and Cadence Design positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Star Holdings position performs unexpectedly, Cadence Design 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 Cadence Design will offset losses from the drop in Cadence Design's long position.| Star Holdings vs. National Waste Management | Star Holdings vs. Fidus Investment Corp | Star Holdings vs. 23Andme Holding Co | Star Holdings vs. US Global Investors |
| Cadence Design vs. Workday | Cadence Design vs. Salesforce | Cadence Design vs. Intuit Inc | Cadence Design vs. Snowflake |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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