Correlation Between Stellar and Hwang Chang

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

By analyzing existing cross correlation between Stellar and Hwang Chang General, you can compare the effects of market volatilities on Stellar and Hwang Chang 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 Hwang Chang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stellar and Hwang Chang.

Diversification Opportunities for Stellar and Hwang Chang

-0.74

Correlation Coefficient

Stellar  Hwang Chang

Pay attention - limited upside

The 3 months correlation between Stellar and Hwang is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Stellar and Hwang Chang General in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hwang Chang General 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 Hwang Chang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hwang Chang General has no effect on the direction of Stellar i.e., Stellar and Hwang Chang go up and down completely randomly.

Pair Corralation between Stellar and Hwang Chang

Assuming the 90 days trading horizon Stellar is expected to under-perform the Hwang Chang. In addition to that, Stellar is 1.57 times more volatile than Hwang Chang General. It trades about -0.06 of its total potential returns per unit of risk. Hwang Chang General is currently generating about 0.13 per unit of volatility. If you would invest  7,380  in Hwang Chang General on December 22, 2024 and sell it today you would earn a total of  2,180  from holding Hwang Chang General or generate 29.54% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	87.69%
Values	Daily Returns

Stellar  vs.  Hwang Chang General

Stellar

Risk-Adjusted Performance

Very Weak

Over the last 90 days Stellar has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Crypto's primary indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for Stellar shareholders.

Hwang Chang General

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Hwang Chang General are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Hwang Chang showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Stellar and Hwang Chang

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

The idea behind Stellar and Hwang Chang General 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.