Correlation Between Star Equity and Trinity Biotech
Can any of the company-specific risk be diversified away by investing in both Star Equity and Trinity Biotech 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 Equity and Trinity Biotech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Star Equity Holdings and Trinity Biotech plc, you can compare the effects of market volatilities on Star Equity and Trinity Biotech 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 Equity with a short position of Trinity Biotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Star Equity and Trinity Biotech.
Diversification Opportunities for Star Equity and Trinity Biotech
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Star and Trinity is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Star Equity Holdings and Trinity Biotech plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trinity Biotech plc and Star Equity 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 Equity Holdings are associated (or correlated) with Trinity Biotech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trinity Biotech plc has no effect on the direction of Star Equity i.e., Star Equity and Trinity Biotech go up and down completely randomly.
Pair Corralation between Star Equity and Trinity Biotech
Given the investment horizon of 90 days Star Equity Holdings is expected to under-perform the Trinity Biotech. But the stock apears to be less risky and, when comparing its historical volatility, Star Equity Holdings is 3.02 times less risky than Trinity Biotech. The stock trades about -0.38 of its potential returns per unit of risk. The Trinity Biotech plc is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 110.00 in Trinity Biotech plc on August 29, 2024 and sell it today you would earn a total of 3.00 from holding Trinity Biotech plc or generate 2.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 97.67% |
| Values | Daily Returns |
Star Equity Holdings vs. Trinity Biotech plc
Performance |
| Timeline |
| Star Equity Holdings |
| Trinity Biotech plc |
Star Equity and Trinity Biotech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Star Equity and Trinity Biotech
The main advantage of trading using opposite Star Equity and Trinity Biotech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Star Equity position performs unexpectedly, Trinity Biotech 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 Trinity Biotech will offset losses from the drop in Trinity Biotech's long position.| Star Equity vs. Genetic Technologies | Star Equity vs. Intelligent Bio Solutions | Star Equity vs. bioAffinity Technologies, | Star Equity vs. Thermo Fisher Scientific |
| Trinity Biotech vs. Star Equity Holdings | Trinity Biotech vs. Standard Biotools | Trinity Biotech vs. Biodesix | Trinity Biotech vs. ENDRA Life Sciences |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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