Correlation Between Star Equity and Olink Holding
Can any of the company-specific risk be diversified away by investing in both Star Equity and Olink Holding 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 Olink Holding 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 Olink Holding AB, you can compare the effects of market volatilities on Star Equity and Olink Holding 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 Olink Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Star Equity and Olink Holding.
Diversification Opportunities for Star Equity and Olink Holding
-0.61 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Star and Olink is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Star Equity Holdings and Olink Holding AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Olink Holding AB 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 Olink Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Olink Holding AB has no effect on the direction of Star Equity i.e., Star Equity and Olink Holding go up and down completely randomly.
Pair Corralation between Star Equity and Olink Holding
Assuming the 90 days horizon Star Equity is expected to generate 9.52 times less return on investment than Olink Holding. In addition to that, Star Equity is 3.88 times more volatile than Olink Holding AB. It trades about 0.01 of its total potential returns per unit of risk. Olink Holding AB is currently generating about 0.42 per unit of volatility. If you would invest 2,404 in Olink Holding AB on September 1, 2024 and sell it today you would earn a total of 204.00 from holding Olink Holding AB or generate 8.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 21.43% |
| Values | Daily Returns |
Star Equity Holdings vs. Olink Holding AB
Performance |
| Timeline |
| Star Equity Holdings |
| Olink Holding AB |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Star Equity and Olink Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Star Equity and Olink Holding
The main advantage of trading using opposite Star Equity and Olink Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Star Equity position performs unexpectedly, Olink Holding 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 Olink Holding will offset losses from the drop in Olink Holding's long position.| Star Equity vs. Star Equity Holdings | Star Equity vs. XOMA Corp | Star Equity vs. Fundamental Global | Star Equity vs. Fortress Biotech Pref |
| Olink Holding vs. Fonar | Olink Holding vs. Burning Rock Biotech | Olink Holding vs. Sera Prognostics | Olink Holding vs. Psychemedics |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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