Correlation Between ST Energy and Interups

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

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

Diversification Opportunities for ST Energy and Interups

0.0

Correlation Coefficient

ST Energy  Interups

Pay attention - limited upside

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

Pair Corralation between ST Energy and Interups

If you would invest  0.01  in Interups on October 26, 2024 and sell it today you would earn a total of  0.00  from holding Interups or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.69%
Values	Daily Returns

ST Energy Transition  vs.  Interups

ST Energy Transition

Risk-Adjusted Performance

0 of 100

Very Weak

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

Interups

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Interups has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, Interups is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with ST Energy and Interups

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

The idea behind ST Energy Transition and Interups 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.