Correlation Between Stardust Power and Gildan Activewear

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

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

Diversification Opportunities for Stardust Power and Gildan Activewear

-0.38

Correlation Coefficient

Stardust Power  Gildan Activewear

Very good diversification

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

Pair Corralation between Stardust Power and Gildan Activewear

Assuming the 90 days horizon Stardust Power is expected to generate 9.42 times more return on investment than Gildan Activewear. However, Stardust Power is 9.42 times more volatile than Gildan Activewear. It trades about 0.08 of its potential returns per unit of risk. Gildan Activewear is currently generating about 0.06 per unit of risk. If you would invest  21.00  in Stardust Power on October 10, 2024 and sell it today you would earn a total of  3.00  from holding Stardust Power or generate 14.29% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	21.57%
Values	Daily Returns

Stardust Power  vs.  Gildan Activewear

Stardust Power

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Stardust Power has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in February 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Gildan Activewear

Risk-Adjusted Performance

1 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Gildan Activewear are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent forward indicators, Gildan Activewear is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Stardust Power and Gildan Activewear

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

The idea behind Stardust Power and Gildan Activewear 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.