Correlation Between Stellar and Rolling Optics
Can any of the company-specific risk be diversified away by investing in both Stellar and Rolling Optics 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 Rolling Optics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stellar and Rolling Optics Holding, you can compare the effects of market volatilities on Stellar and Rolling Optics 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 Rolling Optics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stellar and Rolling Optics.
Diversification Opportunities for Stellar and Rolling Optics
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Stellar and Rolling is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Stellar and Rolling Optics Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rolling Optics Holding 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 Rolling Optics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rolling Optics Holding has no effect on the direction of Stellar i.e., Stellar and Rolling Optics go up and down completely randomly.
Pair Corralation between Stellar and Rolling Optics
Assuming the 90 days trading horizon Stellar is expected to generate 1.71 times more return on investment than Rolling Optics. However, Stellar is 1.71 times more volatile than Rolling Optics Holding. It trades about 0.21 of its potential returns per unit of risk. Rolling Optics Holding is currently generating about 0.08 per unit of risk. If you would invest 36.00 in Stellar on October 21, 2024 and sell it today you would earn a total of 13.00 from holding Stellar or generate 36.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 76.19% |
| Values | Daily Returns |
Stellar vs. Rolling Optics Holding
Performance |
| Timeline |
| Stellar |
| Rolling Optics Holding |
Stellar and Rolling Optics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Stellar and Rolling Optics
The main advantage of trading using opposite Stellar and Rolling Optics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stellar position performs unexpectedly, Rolling Optics 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 Rolling Optics will offset losses from the drop in Rolling Optics' long position.The idea behind Stellar and Rolling Optics Holding 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.| Rolling Optics vs. Integrum AB Series | Rolling Optics vs. Lipigon Pharmaceuticals AB | Rolling Optics vs. Concejo AB | Rolling Optics vs. Diadrom Holding AB |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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