Correlation Between Star Entertainment and Dug Technology Ltd

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

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

Diversification Opportunities for Star Entertainment and Dug Technology Ltd

0.3

Correlation Coefficient

Star Entertainment  Dug Technology Ltd

Weak diversification

The 3 months correlation between Star and Dug is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Star Entertainment Group and Dug Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dug Technology Ltd and Star Entertainment 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 Star Entertainment Group are associated (or correlated) with Dug Technology Ltd. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dug Technology Ltd has no effect on the direction of Star Entertainment i.e., Star Entertainment and Dug Technology Ltd go up and down completely randomly.

Pair Corralation between Star Entertainment and Dug Technology Ltd

Assuming the 90 days trading horizon Star Entertainment Group is expected to under-perform the Dug Technology Ltd. In addition to that, Star Entertainment is 1.97 times more volatile than Dug Technology. It trades about -0.07 of its total potential returns per unit of risk. Dug Technology is currently generating about -0.06 per unit of volatility. If you would invest  129.00  in Dug Technology on December 20, 2024 and sell it today you would lose (23.00) from holding Dug Technology or give up 17.83% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.36%
Values	Daily Returns

Star Entertainment Group  vs.  Dug Technology

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.

Dug Technology Ltd

Risk-Adjusted Performance

Very Weak

Over the last 90 days Dug Technology 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 technical and fundamental 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 Star Entertainment and Dug Technology Ltd

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

The idea behind Star Entertainment Group and Dug Technology 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.