Correlation Between Stellar and SGA Solutions
Can any of the company-specific risk be diversified away by investing in both Stellar and SGA Solutions 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 Stellar and SGA Solutions into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stellar and SGA Solutions CoLtd, you can compare the effects of market volatilities on Stellar and SGA Solutions 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 Stellar with a short position of SGA Solutions. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stellar and SGA Solutions.
Diversification Opportunities for Stellar and SGA Solutions
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Stellar and SGA is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Stellar and SGA Solutions CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SGA Solutions CoLtd and Stellar 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 Stellar are associated (or correlated) with SGA Solutions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SGA Solutions CoLtd has no effect on the direction of Stellar i.e., Stellar and SGA Solutions go up and down completely randomly.
Pair Corralation between Stellar and SGA Solutions
Assuming the 90 days trading horizon Stellar is expected to generate 3.55 times more return on investment than SGA Solutions. However, Stellar is 3.55 times more volatile than SGA Solutions CoLtd. It trades about 0.15 of its potential returns per unit of risk. SGA Solutions CoLtd is currently generating about 0.13 per unit of risk. If you would invest 33.00 in Stellar on October 30, 2024 and sell it today you would earn a total of 7.00 from holding Stellar or generate 21.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Stellar vs. SGA Solutions CoLtd
Performance |
| Timeline |
| Stellar |
| SGA Solutions CoLtd |
Stellar and SGA Solutions Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stellar and SGA Solutions
The main advantage of trading using opposite Stellar and SGA Solutions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stellar position performs unexpectedly, SGA Solutions 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 SGA Solutions will offset losses from the drop in SGA Solutions' long position.The idea behind Stellar and SGA Solutions CoLtd pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| SGA Solutions vs. Samsung Electronics Co | SGA Solutions vs. Samsung Electronics Co | SGA Solutions vs. SK Hynix | SGA Solutions vs. HMM Co |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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