Correlation Between Establishment Labs and Star Equity
Can any of the company-specific risk be diversified away by investing in both Establishment Labs and Star Equity 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 Establishment Labs and Star Equity into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Establishment Labs Holdings and Star Equity Holdings, you can compare the effects of market volatilities on Establishment Labs and Star Equity 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 Establishment Labs with a short position of Star Equity. Check out your portfolio center. Please also check ongoing floating volatility patterns of Establishment Labs and Star Equity.
Diversification Opportunities for Establishment Labs and Star Equity
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Establishment and Star is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Establishment Labs Holdings and Star Equity Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Star Equity Holdings and Establishment Labs 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 Establishment Labs Holdings are associated (or correlated) with Star Equity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Star Equity Holdings has no effect on the direction of Establishment Labs i.e., Establishment Labs and Star Equity go up and down completely randomly.
Pair Corralation between Establishment Labs and Star Equity
If you would invest 3,967 in Establishment Labs Holdings on January 25, 2024 and sell it today you would earn a total of 1,002 from holding Establishment Labs Holdings or generate 25.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
Establishment Labs Holdings vs. Star Equity Holdings
Performance |
| Timeline |
| Establishment Labs |
| Star Equity Holdings |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Establishment Labs and Star Equity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Establishment Labs and Star Equity
The main advantage of trading using opposite Establishment Labs and Star Equity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Establishment Labs position performs unexpectedly, Star Equity 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 Star Equity will offset losses from the drop in Star Equity's long position.The idea behind Establishment Labs Holdings and Star Equity Holdings 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.| Star Equity vs. Discover Financial Services | Star Equity vs. Waste Management | Star Equity vs. Fidus Investment Corp | Star Equity vs. KeyCorp |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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