Correlation Between Starr Peak and Stans Energy
Can any of the company-specific risk be diversified away by investing in both Starr Peak and Stans Energy 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 Starr Peak and Stans Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Starr Peak Exploration and Stans Energy Corp, you can compare the effects of market volatilities on Starr Peak and Stans Energy 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 Starr Peak with a short position of Stans Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Starr Peak and Stans Energy.
Diversification Opportunities for Starr Peak and Stans Energy
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Starr and Stans is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Starr Peak Exploration and Stans Energy Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stans Energy Corp and Starr Peak 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 Starr Peak Exploration are associated (or correlated) with Stans Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stans Energy Corp has no effect on the direction of Starr Peak i.e., Starr Peak and Stans Energy go up and down completely randomly.
Pair Corralation between Starr Peak and Stans Energy
Assuming the 90 days horizon Starr Peak is expected to generate 68.31 times less return on investment than Stans Energy. But when comparing it to its historical volatility, Starr Peak Exploration is 13.44 times less risky than Stans Energy. It trades about 0.01 of its potential returns per unit of risk. Stans Energy Corp is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 0.03 in Stans Energy Corp on November 28, 2024 and sell it today you would lose (0.02) from holding Stans Energy Corp or give up 66.67% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.46% |
| Values | Daily Returns |
Starr Peak Exploration vs. Stans Energy Corp
Performance |
| Timeline |
| Starr Peak Exploration |
| Stans Energy Corp |
Starr Peak and Stans Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Starr Peak and Stans Energy
The main advantage of trading using opposite Starr Peak and Stans Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Starr Peak position performs unexpectedly, Stans Energy 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 Stans Energy will offset losses from the drop in Stans Energy's long position.| Starr Peak vs. Ameriwest Lithium | Starr Peak vs. Global Helium Corp | Starr Peak vs. ZincX Resources Corp | Starr Peak vs. Strategic Resources |
| Stans Energy vs. Ridgestone Mining | Stans Energy vs. Lion Copper and | Stans Energy vs. FPX Nickel Corp | Stans Energy vs. Focus Graphite |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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