Correlation Between Stellar and Apax Global
Can any of the company-specific risk be diversified away by investing in both Stellar and Apax Global 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 Apax Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stellar and Apax Global Alpha, you can compare the effects of market volatilities on Stellar and Apax Global 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 Apax Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stellar and Apax Global.
Diversification Opportunities for Stellar and Apax Global
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Stellar and Apax is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Stellar and Apax Global Alpha in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apax Global Alpha 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 Apax Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apax Global Alpha has no effect on the direction of Stellar i.e., Stellar and Apax Global go up and down completely randomly.
Pair Corralation between Stellar and Apax Global
Assuming the 90 days trading horizon Stellar is expected to generate 5.44 times more return on investment than Apax Global. However, Stellar is 5.44 times more volatile than Apax Global Alpha. It trades about 0.1 of its potential returns per unit of risk. Apax Global Alpha is currently generating about -0.01 per unit of risk. If you would invest 8.60 in Stellar on November 2, 2024 and sell it today you would earn a total of 34.40 from holding Stellar or generate 400.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 59.64% |
| Values | Daily Returns |
Stellar vs. Apax Global Alpha
Performance |
| Timeline |
| Stellar |
| Apax Global Alpha |
Stellar and Apax Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stellar and Apax Global
The main advantage of trading using opposite Stellar and Apax Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stellar position performs unexpectedly, Apax Global 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 Apax Global will offset losses from the drop in Apax Global's long position.The idea behind Stellar and Apax Global Alpha 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.| Apax Global vs. CVS Health Corp | Apax Global vs. Inspiration Healthcare Group | Apax Global vs. Universal Health Services | Apax Global vs. National Beverage Corp |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
Other Complementary Tools
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges |