Correlation Between Stellar and HIMARK

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Can any of the company-specific risk be diversified away by investing in both Stellar and HIMARK 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 HIMARK into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Stellar and HIMARK 145 10 MAY 26, you can compare the effects of market volatilities on Stellar and HIMARK 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 HIMARK. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stellar and HIMARK.

Diversification Opportunities for Stellar and HIMARK

0.87
  Correlation Coefficient

Very poor diversification

The 3 months correlation between Stellar and HIMARK is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Stellar and HIMARK 145 10 MAY 26 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HIMARK 145 10 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 HIMARK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HIMARK 145 10 has no effect on the direction of Stellar i.e., Stellar and HIMARK go up and down completely randomly.

Pair Corralation between Stellar and HIMARK

Assuming the 90 days trading horizon Stellar is expected to generate 6.29 times more return on investment than HIMARK. However, Stellar is 6.29 times more volatile than HIMARK 145 10 MAY 26. It trades about -0.02 of its potential returns per unit of risk. HIMARK 145 10 MAY 26 is currently generating about -0.29 per unit of risk. If you would invest  43.00  in Stellar on October 12, 2024 and sell it today you would lose (4.00) from holding Stellar or give up 9.3% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy38.1%
ValuesDaily Returns

Stellar  vs.  HIMARK 145 10 MAY 26

 Performance 
       Timeline  
Stellar 

Risk-Adjusted Performance

19 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Stellar are ranked lower than 19 (%) 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.
HIMARK 145 10 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days HIMARK 145 10 MAY 26 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for HIMARK 145 10 MAY 26 investors.

Stellar and HIMARK Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Stellar and HIMARK

The main advantage of trading using opposite Stellar and HIMARK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stellar position performs unexpectedly, HIMARK 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 HIMARK will offset losses from the drop in HIMARK's long position.
The idea behind Stellar and HIMARK 145 10 MAY 26 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.

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