Correlation Between Mirrabooka Investments and Star Entertainment

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

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

Diversification Opportunities for Mirrabooka Investments and Star Entertainment

0.13

Correlation Coefficient

Mirrabooka Investments  Star Entertainment

Average diversification

The 3 months correlation between Mirrabooka and Star is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Mirrabooka Investments and Star Entertainment Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Star Entertainment and Mirrabooka Investments 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 Mirrabooka Investments are associated (or correlated) with Star Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Star Entertainment has no effect on the direction of Mirrabooka Investments i.e., Mirrabooka Investments and Star Entertainment go up and down completely randomly.

Pair Corralation between Mirrabooka Investments and Star Entertainment

Assuming the 90 days trading horizon Mirrabooka Investments is expected to generate 0.12 times more return on investment than Star Entertainment. However, Mirrabooka Investments is 8.1 times less risky than Star Entertainment. It trades about -0.01 of its potential returns per unit of risk. Star Entertainment Group is currently generating about -0.07 per unit of risk. If you would invest  332.00  in Mirrabooka Investments on December 22, 2024 and sell it today you would lose (4.00) from holding Mirrabooka Investments or give up 1.2% of portfolio value over 90 days.

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

Mirrabooka Investments  vs.  Star Entertainment Group

Mirrabooka Investments

Risk-Adjusted Performance

Very Weak

Over the last 90 days Mirrabooka Investments has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Mirrabooka Investments is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Star Entertainment

Risk-Adjusted Performance

Very Weak

Over the last 90 days Star Entertainment Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic 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 Mirrabooka Investments and Star Entertainment

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

The idea behind Mirrabooka Investments and Star Entertainment 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.