Correlation Between Star Alliance and Almadex Minerals

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

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

Diversification Opportunities for Star Alliance and Almadex Minerals

0.37

Correlation Coefficient

Star Alliance  Almadex Minerals

Weak diversification

The 3 months correlation between Star and Almadex is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Star Alliance International and Almadex Minerals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Almadex Minerals and Star Alliance 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 Alliance International are associated (or correlated) with Almadex Minerals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Almadex Minerals has no effect on the direction of Star Alliance i.e., Star Alliance and Almadex Minerals go up and down completely randomly.

Pair Corralation between Star Alliance and Almadex Minerals

Given the investment horizon of 90 days Star Alliance International is expected to generate 0.92 times more return on investment than Almadex Minerals. However, Star Alliance International is 1.09 times less risky than Almadex Minerals. It trades about -0.01 of its potential returns per unit of risk. Almadex Minerals is currently generating about -0.14 per unit of risk. If you would invest  0.09  in Star Alliance International on October 5, 2024 and sell it today you would lose (0.02) from holding Star Alliance International or give up 22.22% of portfolio value over 90 days.

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

Star Alliance International  vs.  Almadex Minerals

Star Alliance Intern

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Star Alliance International has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in February 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Almadex Minerals

Risk-Adjusted Performance

0 of 100

Weak

Over the last 90 days Almadex Minerals has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's primary indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Star Alliance and Almadex Minerals

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

The idea behind Star Alliance International and Almadex Minerals 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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.