Correlation Between Starboard Investment and Strategy Shares

Can any of the company-specific risk be diversified away by investing in both Starboard Investment and Strategy Shares 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 Starboard Investment and Strategy Shares into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Starboard Investment Trust and Strategy Shares , you can compare the effects of market volatilities on Starboard Investment and Strategy Shares 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 Starboard Investment with a short position of Strategy Shares. Check out your portfolio center. Please also check ongoing floating volatility patterns of Starboard Investment and Strategy Shares.

Diversification Opportunities for Starboard Investment and Strategy Shares

0.27

Correlation Coefficient

Starboard Investment  Strategy Shares

Modest diversification

The 3 months correlation between Starboard and Strategy is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Starboard Investment Trust and Strategy Shares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Strategy Shares and Starboard Investment 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 Starboard Investment Trust are associated (or correlated) with Strategy Shares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Strategy Shares has no effect on the direction of Starboard Investment i.e., Starboard Investment and Strategy Shares go up and down completely randomly.

Pair Corralation between Starboard Investment and Strategy Shares

Given the investment horizon of 90 days Starboard Investment Trust is expected to generate 1.61 times more return on investment than Strategy Shares. However, Starboard Investment is 1.61 times more volatile than Strategy Shares . It trades about -0.07 of its potential returns per unit of risk. Strategy Shares is currently generating about -0.11 per unit of risk. If you would invest  796.00  in Starboard Investment Trust on September 22, 2024 and sell it today you would lose (14.00) from holding Starboard Investment Trust or give up 1.76% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Starboard Investment Trust  vs.  Strategy Shares

Starboard Investment

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Starboard Investment Trust has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Starboard Investment is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Strategy Shares

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Strategy Shares has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong technical and fundamental indicators, Strategy Shares is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Starboard Investment and Strategy Shares

The main advantage of trading using opposite Starboard Investment and Strategy Shares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Starboard Investment position performs unexpectedly, Strategy Shares 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 Strategy Shares will offset losses from the drop in Strategy Shares' long position.

The idea behind Starboard Investment Trust and Strategy Shares 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.

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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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.