Correlation Between 655844CN6 and Starbucks

Can any of the company-specific risk be diversified away by investing in both 655844CN6 and Starbucks 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 655844CN6 and Starbucks into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between NSC 37 15 MAR 53 and Starbucks, you can compare the effects of market volatilities on 655844CN6 and Starbucks 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 655844CN6 with a short position of Starbucks. Check out your portfolio center. Please also check ongoing floating volatility patterns of 655844CN6 and Starbucks.

Diversification Opportunities for 655844CN6 and Starbucks

0.08

Correlation Coefficient

655844CN6  Starbucks

Significant diversification

The 3 months correlation between 655844CN6 and Starbucks is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding NSC 37 15 MAR 53 and Starbucks in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Starbucks and 655844CN6 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 NSC 37 15 MAR 53 are associated (or correlated) with Starbucks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Starbucks has no effect on the direction of 655844CN6 i.e., 655844CN6 and Starbucks go up and down completely randomly.

Pair Corralation between 655844CN6 and Starbucks

Assuming the 90 days trading horizon NSC 37 15 MAR 53 is expected to under-perform the Starbucks. In addition to that, 655844CN6 is 3.28 times more volatile than Starbucks. It trades about -0.03 of its total potential returns per unit of risk. Starbucks is currently generating about -0.02 per unit of volatility. If you would invest  9,418  in Starbucks on October 12, 2024 and sell it today you would lose (158.00) from holding Starbucks or give up 1.68% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	65.57%
Values	Daily Returns

NSC 37 15 MAR 53  vs.  Starbucks

NSC 37 15

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NSC 37 15 MAR 53 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for NSC 37 15 MAR 53 investors.

Starbucks

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Starbucks has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Starbucks is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with 655844CN6 and Starbucks

The main advantage of trading using opposite 655844CN6 and Starbucks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 655844CN6 position performs unexpectedly, Starbucks 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 Starbucks will offset losses from the drop in Starbucks' long position.

The idea behind NSC 37 15 MAR 53 and Starbucks 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.