Correlation Between StarTek and FiscalNote Holdings

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

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

Diversification Opportunities for StarTek and FiscalNote Holdings

0.72

Correlation Coefficient

StarTek  FiscalNote Holdings

Poor diversification

The 3 months correlation between StarTek and FiscalNote is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding StarTek and FiscalNote Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FiscalNote Holdings and StarTek 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 StarTek are associated (or correlated) with FiscalNote Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FiscalNote Holdings has no effect on the direction of StarTek i.e., StarTek and FiscalNote Holdings go up and down completely randomly.

Pair Corralation between StarTek and FiscalNote Holdings

If you would invest  93.00  in FiscalNote Holdings on September 25, 2024 and sell it today you would earn a total of  21.00  from holding FiscalNote Holdings or generate 22.58% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	4.76%
Values	Daily Returns

StarTek  vs.  FiscalNote Holdings

StarTek

Risk-Adjusted Performance

0 of 100

Very Weak

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

FiscalNote Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days FiscalNote Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, FiscalNote Holdings is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with StarTek and FiscalNote Holdings

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

The idea behind StarTek and FiscalNote Holdings 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.