Correlation Between Stellar and CIA ENGER
Can any of the company-specific risk be diversified away by investing in both Stellar and CIA ENGER 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 CIA ENGER into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stellar and CIA ENGER ADR, you can compare the effects of market volatilities on Stellar and CIA ENGER 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 CIA ENGER. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stellar and CIA ENGER.
Diversification Opportunities for Stellar and CIA ENGER
Poor diversification
The 3 months correlation between Stellar and CIA is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Stellar and CIA ENGER ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CIA ENGER ADR 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 CIA ENGER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CIA ENGER ADR has no effect on the direction of Stellar i.e., Stellar and CIA ENGER go up and down completely randomly.
Pair Corralation between Stellar and CIA ENGER
Assuming the 90 days trading horizon Stellar is expected to generate 24.86 times more return on investment than CIA ENGER. However, Stellar is 24.86 times more volatile than CIA ENGER ADR. It trades about 0.17 of its potential returns per unit of risk. CIA ENGER ADR is currently generating about 0.24 per unit of risk. If you would invest 38.00 in Stellar on October 20, 2024 and sell it today you would earn a total of 11.00 from holding Stellar or generate 28.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 77.27% |
| Values | Daily Returns |
Stellar vs. CIA ENGER ADR
Performance |
| Timeline |
| Stellar |
| CIA ENGER ADR |
Stellar and CIA ENGER Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stellar and CIA ENGER
The main advantage of trading using opposite Stellar and CIA ENGER positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stellar position performs unexpectedly, CIA ENGER 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 CIA ENGER will offset losses from the drop in CIA ENGER's long position.The idea behind Stellar and CIA ENGER ADR 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.| CIA ENGER vs. IBERDROLA ADR1 EO | CIA ENGER vs. SSE PLC ADR | CIA ENGER vs. C PARAN EN | CIA ENGER vs. Companhia Energtica de |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
Other Complementary Tools
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities |