Correlation Between Stellar and Highpeak Energy

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

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

Diversification Opportunities for Stellar and Highpeak Energy

0.48

Correlation Coefficient

Stellar  Highpeak Energy

Very weak diversification

The 3 months correlation between Stellar and Highpeak is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Stellar and Highpeak Energy Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Highpeak Energy Acqu 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 Highpeak Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Highpeak Energy Acqu has no effect on the direction of Stellar i.e., Stellar and Highpeak Energy go up and down completely randomly.

Pair Corralation between Stellar and Highpeak Energy

Assuming the 90 days trading horizon Stellar is expected to generate 2.27 times more return on investment than Highpeak Energy. However, Stellar is 2.27 times more volatile than Highpeak Energy Acquisition. It trades about 0.1 of its potential returns per unit of risk. Highpeak Energy Acquisition is currently generating about -0.02 per unit of risk. If you would invest  8.90  in Stellar on October 10, 2024 and sell it today you would earn a total of  33.10  from holding Stellar or generate 371.91% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	59.8%
Values	Daily Returns

Stellar  vs.  Highpeak Energy Acquisition

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.

Highpeak Energy Acqu

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Highpeak Energy Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Highpeak Energy is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Stellar and Highpeak Energy

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

The idea behind Stellar and Highpeak Energy Acquisition 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.