Correlation Between Star Entertainment and OOhMedia

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

Diversification Opportunities for Star Entertainment and OOhMedia

-0.55

Correlation Coefficient

Star Entertainment  OOhMedia

Excellent diversification

The 3 months correlation between Star and OOhMedia is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Star Entertainment Group and oOhMedia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on oOhMedia 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 OOhMedia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of oOhMedia has no effect on the direction of Star Entertainment i.e., Star Entertainment and OOhMedia go up and down completely randomly.

Pair Corralation between Star Entertainment and OOhMedia

Assuming the 90 days trading horizon Star Entertainment Group is expected to under-perform the OOhMedia. In addition to that, Star Entertainment is 2.75 times more volatile than oOhMedia. It trades about -0.07 of its total potential returns per unit of risk. oOhMedia is currently generating about 0.16 per unit of volatility. If you would invest  114.00  in oOhMedia on December 23, 2024 and sell it today you would earn a total of  36.00  from holding oOhMedia or generate 31.58% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Star Entertainment Group  vs.  oOhMedia

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 uncertain 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.

oOhMedia

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in oOhMedia are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain essential indicators, OOhMedia unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Star Entertainment and OOhMedia

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

The idea behind Star Entertainment Group and oOhMedia 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.