Correlation Between South Star and StrikePoint Gold
Can any of the company-specific risk be diversified away by investing in both South Star and StrikePoint Gold 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 South Star and StrikePoint Gold into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between South Star Battery and StrikePoint Gold, you can compare the effects of market volatilities on South Star and StrikePoint Gold 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 South Star with a short position of StrikePoint Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of South Star and StrikePoint Gold.
Diversification Opportunities for South Star and StrikePoint Gold
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between South and StrikePoint is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding South Star Battery and StrikePoint Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on StrikePoint Gold and South Star 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 South Star Battery are associated (or correlated) with StrikePoint Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of StrikePoint Gold has no effect on the direction of South Star i.e., South Star and StrikePoint Gold go up and down completely randomly.
Pair Corralation between South Star and StrikePoint Gold
Assuming the 90 days horizon South Star is expected to generate 512.87 times less return on investment than StrikePoint Gold. But when comparing it to its historical volatility, South Star Battery is 26.34 times less risky than StrikePoint Gold. It trades about 0.01 of its potential returns per unit of risk. StrikePoint Gold is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 29.00 in StrikePoint Gold on August 26, 2024 and sell it today you would lose (12.00) from holding StrikePoint Gold or give up 41.38% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 90.0% |
| Values | Daily Returns |
South Star Battery vs. StrikePoint Gold
Performance |
| Timeline |
| South Star Battery |
| StrikePoint Gold |
South Star and StrikePoint Gold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with South Star and StrikePoint Gold
The main advantage of trading using opposite South Star and StrikePoint Gold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if South Star position performs unexpectedly, StrikePoint Gold 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 StrikePoint Gold will offset losses from the drop in StrikePoint Gold's long position.| South Star vs. Norra Metals Corp | South Star vs. ZincX Resources Corp | South Star vs. Nuinsco Resources Limited | South Star vs. Mundoro Capital |
| StrikePoint Gold vs. Norra Metals Corp | StrikePoint Gold vs. ZincX Resources Corp | StrikePoint Gold vs. Nuinsco Resources Limited | StrikePoint Gold vs. South Star Battery |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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