Correlation Between STI Education and Figaro Coffee
Can any of the company-specific risk be diversified away by investing in both STI Education and Figaro Coffee 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 STI Education and Figaro Coffee into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between STI Education Systems and Figaro Coffee Group, you can compare the effects of market volatilities on STI Education and Figaro Coffee 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 STI Education with a short position of Figaro Coffee. Check out your portfolio center. Please also check ongoing floating volatility patterns of STI Education and Figaro Coffee.
Diversification Opportunities for STI Education and Figaro Coffee
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between STI and Figaro is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding STI Education Systems and Figaro Coffee Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Figaro Coffee Group and STI Education 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 STI Education Systems are associated (or correlated) with Figaro Coffee. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Figaro Coffee Group has no effect on the direction of STI Education i.e., STI Education and Figaro Coffee go up and down completely randomly.
Pair Corralation between STI Education and Figaro Coffee
Assuming the 90 days trading horizon STI Education Systems is expected to generate 1.0 times more return on investment than Figaro Coffee. However, STI Education is 1.0 times more volatile than Figaro Coffee Group. It trades about 0.22 of its potential returns per unit of risk. Figaro Coffee Group is currently generating about -0.19 per unit of risk. If you would invest 116.00 in STI Education Systems on August 25, 2024 and sell it today you would earn a total of 12.00 from holding STI Education Systems or generate 10.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
STI Education Systems vs. Figaro Coffee Group
Performance |
| Timeline |
| STI Education Systems |
| Figaro Coffee Group |
STI Education and Figaro Coffee Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with STI Education and Figaro Coffee
The main advantage of trading using opposite STI Education and Figaro Coffee positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if STI Education position performs unexpectedly, Figaro Coffee 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 Figaro Coffee will offset losses from the drop in Figaro Coffee's long position.| STI Education vs. Allhome Corp | STI Education vs. Altus Property Ventures | STI Education vs. AgriNurture | STI Education vs. Security Bank Corp |
| Figaro Coffee vs. Transpacific Broadband Group | Figaro Coffee vs. Atlas Consolidated Mining | Figaro Coffee vs. Crown Asia Chemicals | Figaro Coffee vs. Converge Information Communications |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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