Correlation Between Stark Focus and Angus Gold

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

By analyzing existing cross correlation between Stark Focus Group and Angus Gold, you can compare the effects of market volatilities on Stark Focus and Angus Gold 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 Stark Focus with a short position of Angus Gold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stark Focus and Angus Gold.

Diversification Opportunities for Stark Focus and Angus Gold

-0.19

Correlation Coefficient

Stark Focus  Angus Gold

Good diversification

The 3 months correlation between Stark and Angus is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Stark Focus Group and Angus Gold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Angus Gold and Stark Focus 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 Stark Focus Group are associated (or correlated) with Angus Gold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Angus Gold has no effect on the direction of Stark Focus i.e., Stark Focus and Angus Gold go up and down completely randomly.

Pair Corralation between Stark Focus and Angus Gold

Given the investment horizon of 90 days Stark Focus Group is expected to generate 1.71 times more return on investment than Angus Gold. However, Stark Focus is 1.71 times more volatile than Angus Gold. It trades about 0.1 of its potential returns per unit of risk. Angus Gold is currently generating about -0.01 per unit of risk. If you would invest  3.54  in Stark Focus Group on September 12, 2024 and sell it today you would earn a total of  1.45  from holding Stark Focus Group or generate 40.96% return on investment over 90 days.

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

Stark Focus Group  vs.  Angus Gold

Stark Focus Group

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Stark Focus Group are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly inconsistent technical and fundamental indicators, Stark Focus reported solid returns over the last few months and may actually be approaching a breakup point.

Angus Gold

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Angus Gold has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Angus Gold is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Stark Focus and Angus Gold

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

The idea behind Stark Focus Group and Angus Gold 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.