Correlation Between CryptoStar Corp and North American

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

By analyzing existing cross correlation between CryptoStar Corp and North American Financial, you can compare the effects of market volatilities on CryptoStar Corp and North American 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 CryptoStar Corp with a short position of North American. Check out your portfolio center. Please also check ongoing floating volatility patterns of CryptoStar Corp and North American.

Diversification Opportunities for CryptoStar Corp and North American

0.59

Correlation Coefficient

CryptoStar Corp  North American

Very weak diversification

The 3 months correlation between CryptoStar and North is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding CryptoStar Corp and North American Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on North American Financial and CryptoStar Corp 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 CryptoStar Corp are associated (or correlated) with North American. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of North American Financial has no effect on the direction of CryptoStar Corp i.e., CryptoStar Corp and North American go up and down completely randomly.

Pair Corralation between CryptoStar Corp and North American

Assuming the 90 days trading horizon CryptoStar Corp is not expected to generate positive returns. Moreover, CryptoStar Corp is 6.28 times more volatile than North American Financial. It trades away all of its potential returns to assume current level of volatility. North American Financial is currently generating about -0.07 per unit of risk. If you would invest  2.50  in CryptoStar Corp on December 23, 2024 and sell it today you would lose (1.00) from holding CryptoStar Corp or give up 40.0% of portfolio value over 90 days.

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

CryptoStar Corp  vs.  North American Financial

CryptoStar Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days CryptoStar Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, CryptoStar Corp is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

North American Financial

Risk-Adjusted Performance

Very Weak

Over the last 90 days North American Financial has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with CryptoStar Corp and North American

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

The idea behind CryptoStar Corp and North American Financial 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.