Correlation Between Stellar and CELR

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

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

Diversification Opportunities for Stellar and CELR

0.8

Correlation Coefficient

Stellar  CELR

Very poor diversification

The 3 months correlation between Stellar and CELR is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Stellar and CELR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CELR 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 CELR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CELR has no effect on the direction of Stellar i.e., Stellar and CELR go up and down completely randomly.

Pair Corralation between Stellar and CELR

Assuming the 90 days trading horizon Stellar is expected to generate 1.05 times more return on investment than CELR. However, Stellar is 1.05 times more volatile than CELR. It trades about -0.02 of its potential returns per unit of risk. CELR is currently generating about -0.16 per unit of risk. If you would invest  33.00  in Stellar on December 30, 2024 and sell it today you would lose (6.00) from holding Stellar or give up 18.18% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

Stellar  vs.  CELR

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 latest unsteady performance, the Crypto's primary indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for Stellar shareholders.

CELR

Risk-Adjusted Performance

Very Weak

Over the last 90 days CELR 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 fundamental 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 CELR shareholders.

Pair Trading with Stellar and CELR

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

The idea behind Stellar and CELR 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.