Correlation Between RH and Starwin Media

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

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

Diversification Opportunities for RH and Starwin Media

0.0

Correlation Coefficient

RH  Starwin Media

Pay attention - limited upside

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

Pair Corralation between RH and Starwin Media

If you would invest  32,569  in RH on October 25, 2024 and sell it today you would earn a total of  11,712  from holding RH or generate 35.96% return on investment over 90 days.

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

RH  vs.  Starwin Media Holdings

RH

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in RH are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite fairly uncertain technical indicators, RH demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Starwin Media Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Starwin Media Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound primary indicators, Starwin Media is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with RH and Starwin Media

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

The idea behind RH and Starwin Media Holdings 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.