Correlation Between Star Entertainment and Land Homes

Can any of the company-specific risk be diversified away by investing in both Star Entertainment and Land Homes 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 Land Homes 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 Land Homes Group, you can compare the effects of market volatilities on Star Entertainment and Land Homes 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 Land Homes. Check out your portfolio center. Please also check ongoing floating volatility patterns of Star Entertainment and Land Homes.

Diversification Opportunities for Star Entertainment and Land Homes

0.0

Correlation Coefficient

Star Entertainment  Land Homes

Pay attention - limited upside

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

Pair Corralation between Star Entertainment and Land Homes

Assuming the 90 days trading horizon Star Entertainment Group is expected to under-perform the Land Homes. In addition to that, Star Entertainment is 4.16 times more volatile than Land Homes Group. It trades about -0.05 of its total potential returns per unit of risk. Land Homes Group is currently generating about -0.11 per unit of volatility. If you would invest  1.00  in Land Homes Group on October 3, 2024 and sell it today you would lose (0.30) from holding Land Homes Group or give up 30.0% of portfolio value over 90 days.

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

Star Entertainment Group  vs.  Land Homes Group

Star Entertainment

Risk-Adjusted Performance

0 of 100

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 uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Land Homes Group

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Star Entertainment and Land Homes

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

The idea behind Star Entertainment Group and Land Homes 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.