Correlation Between TRON and Star Pacific

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

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

Diversification Opportunities for TRON and Star Pacific

0.04

Correlation Coefficient

TRON  Star Pacific

Significant diversification

The 3 months correlation between TRON and Star is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding TRON and Star Pacific Tbk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Star Pacific Tbk and TRON 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 TRON are associated (or correlated) with Star Pacific. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Star Pacific Tbk has no effect on the direction of TRON i.e., TRON and Star Pacific go up and down completely randomly.

Pair Corralation between TRON and Star Pacific

Assuming the 90 days trading horizon TRON is expected to generate 2.97 times more return on investment than Star Pacific. However, TRON is 2.97 times more volatile than Star Pacific Tbk. It trades about 0.09 of its potential returns per unit of risk. Star Pacific Tbk is currently generating about 0.0 per unit of risk. If you would invest  6.01  in TRON on October 9, 2024 and sell it today you would earn a total of  20.99  from holding TRON or generate 349.25% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	63.33%
Values	Daily Returns

TRON  vs.  Star Pacific Tbk

TRON

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in TRON are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady basic indicators, TRON exhibited solid returns over the last few months and may actually be approaching a breakup point.

Star Pacific Tbk

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Star Pacific Tbk are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent forward-looking signals, Star Pacific is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with TRON and Star Pacific

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

The idea behind TRON and Star Pacific Tbk 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.