Correlation Between Chia and STAR AFRICA

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

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

Diversification Opportunities for Chia and STAR AFRICA

0.3

Correlation Coefficient

Chia  STAR AFRICA

Weak diversification

The 3 months correlation between Chia and STAR is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Chia and STAR AFRICA PORATION in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STAR AFRICA PORATION and Chia 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 Chia are associated (or correlated) with STAR AFRICA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of STAR AFRICA PORATION has no effect on the direction of Chia i.e., Chia and STAR AFRICA go up and down completely randomly.

Pair Corralation between Chia and STAR AFRICA

Assuming the 90 days trading horizon Chia is expected to under-perform the STAR AFRICA. But the crypto coin apears to be less risky and, when comparing its historical volatility, Chia is 1.27 times less risky than STAR AFRICA. The crypto coin trades about -0.19 of its potential returns per unit of risk. The STAR AFRICA PORATION is currently generating about -0.11 of returns per unit of risk over similar time horizon. If you would invest  240.00  in STAR AFRICA PORATION on October 12, 2024 and sell it today you would lose (40.00) from holding STAR AFRICA PORATION or give up 16.67% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	90.48%
Values	Daily Returns

Chia  vs.  STAR AFRICA PORATION

Chia

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Chia are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical indicators, Chia exhibited solid returns over the last few months and may actually be approaching a breakup point.

STAR AFRICA PORATION

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in STAR AFRICA PORATION are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly inconsistent fundamental indicators, STAR AFRICA may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Chia and STAR AFRICA

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

The idea behind Chia and STAR AFRICA PORATION 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.