Correlation Between Cardlytics and Star Fashion

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

By analyzing existing cross correlation between Cardlytics and Star Fashion Culture, you can compare the effects of market volatilities on Cardlytics and Star Fashion 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 Cardlytics with a short position of Star Fashion. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cardlytics and Star Fashion.

Diversification Opportunities for Cardlytics and Star Fashion

0.38

Correlation Coefficient

Cardlytics  Star Fashion

Weak diversification

The 3 months correlation between Cardlytics and Star is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Cardlytics and Star Fashion Culture in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Star Fashion Culture and Cardlytics 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 Cardlytics are associated (or correlated) with Star Fashion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Star Fashion Culture has no effect on the direction of Cardlytics i.e., Cardlytics and Star Fashion go up and down completely randomly.

Pair Corralation between Cardlytics and Star Fashion

Given the investment horizon of 90 days Cardlytics is expected to generate 0.42 times more return on investment than Star Fashion. However, Cardlytics is 2.38 times less risky than Star Fashion. It trades about -0.15 of its potential returns per unit of risk. Star Fashion Culture is currently generating about -0.11 per unit of risk. If you would invest  383.00  in Cardlytics on December 29, 2024 and sell it today you would lose (182.00) from holding Cardlytics or give up 47.52% of portfolio value over 90 days.

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

Cardlytics  vs.  Star Fashion Culture

Cardlytics

Risk-Adjusted Performance

Very Weak

Over the last 90 days Cardlytics has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's essential indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Star Fashion Culture

Risk-Adjusted Performance

Very Weak

Over the last 90 days Star Fashion Culture has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's technical and fundamental indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Cardlytics and Star Fashion

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

The idea behind Cardlytics and Star Fashion Culture 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.

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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.