Correlation Between Techgen Metals and Stelar Metals

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

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

Diversification Opportunities for Techgen Metals and Stelar Metals

0.39

Correlation Coefficient

Techgen Metals  Stelar Metals

Weak diversification

The 3 months correlation between Techgen and Stelar is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Techgen Metals and Stelar Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stelar Metals and Techgen Metals 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 Techgen Metals are associated (or correlated) with Stelar Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stelar Metals has no effect on the direction of Techgen Metals i.e., Techgen Metals and Stelar Metals go up and down completely randomly.

Pair Corralation between Techgen Metals and Stelar Metals

Assuming the 90 days trading horizon Techgen Metals is expected to generate 1.51 times more return on investment than Stelar Metals. However, Techgen Metals is 1.51 times more volatile than Stelar Metals. It trades about -0.01 of its potential returns per unit of risk. Stelar Metals is currently generating about -0.08 per unit of risk. If you would invest  3.60  in Techgen Metals on September 18, 2024 and sell it today you would lose (0.40) from holding Techgen Metals or give up 11.11% of portfolio value over 90 days.

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

Techgen Metals  vs.  Stelar Metals

Techgen Metals

Risk-Adjusted Performance

0 of 100

Very Weak

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

Stelar Metals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Stelar Metals 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 fundamental drivers remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Techgen Metals and Stelar Metals

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

The idea behind Techgen Metals and Stelar Metals 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.