Correlation Between Star Equity and Powell Max
Can any of the company-specific risk be diversified away by investing in both Star Equity and Powell Max 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 Powell Max 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 Powell Max Limited, you can compare the effects of market volatilities on Star Equity and Powell Max 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 Powell Max. Check out your portfolio center. Please also check ongoing floating volatility patterns of Star Equity and Powell Max.
Diversification Opportunities for Star Equity and Powell Max
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Star and Powell is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Star Equity Holdings and Powell Max Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Powell Max Limited 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 Powell Max. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Powell Max Limited has no effect on the direction of Star Equity i.e., Star Equity and Powell Max go up and down completely randomly.
Pair Corralation between Star Equity and Powell Max
Assuming the 90 days horizon Star Equity Holdings is expected to generate 0.16 times more return on investment than Powell Max. However, Star Equity Holdings is 6.45 times less risky than Powell Max. It trades about 0.04 of its potential returns per unit of risk. Powell Max Limited is currently generating about -0.07 per unit of risk. If you would invest 931.00 in Star Equity Holdings on August 28, 2024 and sell it today you would earn a total of 6.00 from holding Star Equity Holdings or generate 0.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Star Equity Holdings vs. Powell Max Limited
Performance |
| Timeline |
| Star Equity Holdings |
| Powell Max Limited |
Star Equity and Powell Max Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Star Equity and Powell Max
The main advantage of trading using opposite Star Equity and Powell Max positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Star Equity position performs unexpectedly, Powell Max 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 Powell Max will offset losses from the drop in Powell Max'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 |
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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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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