Correlation Between Exagen and Star Equity

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

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

Diversification Opportunities for Exagen and Star Equity

-0.5

Correlation Coefficient

Exagen  Star Equity

Very good diversification

The 3 months correlation between Exagen and Star is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Exagen Inc and Star Equity Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Star Equity Holdings and Exagen 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 Exagen Inc are associated (or correlated) with Star Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Star Equity Holdings has no effect on the direction of Exagen i.e., Exagen and Star Equity go up and down completely randomly.

Pair Corralation between Exagen and Star Equity

Considering the 90-day investment horizon Exagen Inc is expected to generate 4.63 times more return on investment than Star Equity. However, Exagen is 4.63 times more volatile than Star Equity Holdings. It trades about 0.04 of its potential returns per unit of risk. Star Equity Holdings is currently generating about 0.09 per unit of risk. If you would invest  428.00  in Exagen Inc on December 28, 2024 and sell it today you would lose (4.00) from holding Exagen Inc or give up 0.93% of portfolio value over 90 days.

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

Exagen Inc  vs.  Star Equity Holdings

Exagen Inc

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Exagen Inc are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very weak technical and fundamental indicators, Exagen displayed solid returns over the last few months and may actually be approaching a breakup point.

Star Equity Holdings

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Star Equity Holdings are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, Star Equity may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Exagen and Star Equity

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

The idea behind Exagen Inc and Star Equity Holdings 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.