Correlation Between Eastern Michigan and STAR Financial

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

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

Diversification Opportunities for Eastern Michigan and STAR Financial

0.0

Correlation Coefficient

Eastern Michigan  STAR Financial

Pay attention - limited upside

The 3 months correlation between Eastern and STAR is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Eastern Michigan Financial and STAR Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STAR Financial Group and Eastern Michigan 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 Eastern Michigan Financial are associated (or correlated) with STAR Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of STAR Financial Group has no effect on the direction of Eastern Michigan i.e., Eastern Michigan and STAR Financial go up and down completely randomly.

Pair Corralation between Eastern Michigan and STAR Financial

If you would invest  3,050  in Eastern Michigan Financial on September 5, 2024 and sell it today you would earn a total of  500.00  from holding Eastern Michigan Financial or generate 16.39% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Eastern Michigan Financial  vs.  STAR Financial Group

Eastern Michigan Fin

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Eastern Michigan Financial are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of very weak forward indicators, Eastern Michigan displayed solid returns over the last few months and may actually be approaching a breakup point.

STAR Financial Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days STAR Financial Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong technical and fundamental indicators, STAR Financial is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Eastern Michigan and STAR Financial

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

The idea behind Eastern Michigan Financial and STAR Financial Group 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.