Correlation Between Stellar and La Franaise

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

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

Diversification Opportunities for Stellar and La Franaise

0.25

Correlation Coefficient

Stellar  La Franaise

Modest diversification

The 3 months correlation between Stellar and 1WE is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Stellar and La Franaise des in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on La Franaise des and Stellar 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 Stellar are associated (or correlated) with La Franaise. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of La Franaise des has no effect on the direction of Stellar i.e., Stellar and La Franaise go up and down completely randomly.

Pair Corralation between Stellar and La Franaise

Assuming the 90 days trading horizon Stellar is expected to generate 6.06 times more return on investment than La Franaise. However, Stellar is 6.06 times more volatile than La Franaise des. It trades about 0.1 of its potential returns per unit of risk. La Franaise des is currently generating about 0.01 per unit of risk. If you would invest  9.03  in Stellar on October 11, 2024 and sell it today you would earn a total of  32.97  from holding Stellar or generate 365.12% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	59.2%
Values	Daily Returns

Stellar  vs.  La Franaise des

Stellar

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Stellar are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady primary indicators, Stellar exhibited solid returns over the last few months and may actually be approaching a breakup point.

La Franaise des

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in La Franaise des are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, La Franaise is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Stellar and La Franaise

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

The idea behind Stellar and La Franaise des 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.