Correlation Between Stellar and Performance Trust

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

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

Diversification Opportunities for Stellar and Performance Trust

0.67

Correlation Coefficient

Stellar  Performance Trust

Poor diversification

The 3 months correlation between Stellar and Performance is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Stellar and Performance Trust Credit in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Performance Trust Credit 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 Performance Trust. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Performance Trust Credit has no effect on the direction of Stellar i.e., Stellar and Performance Trust go up and down completely randomly.

Pair Corralation between Stellar and Performance Trust

Assuming the 90 days trading horizon Stellar is expected to under-perform the Performance Trust. In addition to that, Stellar is 47.5 times more volatile than Performance Trust Credit. It trades about -0.03 of its total potential returns per unit of risk. Performance Trust Credit is currently generating about -0.37 per unit of volatility. If you would invest  902.00  in Performance Trust Credit on October 11, 2024 and sell it today you would lose (12.00) from holding Performance Trust Credit or give up 1.33% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	95.45%
Values	Daily Returns

Stellar  vs.  Performance Trust Credit

Stellar

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Stellar are ranked lower than 18 (%) 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.

Performance Trust Credit

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Performance Trust Credit has generated negative risk-adjusted returns adding no value to fund investors. In spite of fairly strong basic indicators, Performance Trust is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Stellar and Performance Trust

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

The idea behind Stellar and Performance Trust Credit 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 CEOs Directory module to screen CEOs from public companies around the world.