Correlation Between Arena Star and Analyst IMS

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

By analyzing existing cross correlation between Arena Star Group and Analyst IMS Investment, you can compare the effects of market volatilities on Arena Star and Analyst IMS 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 Arena Star with a short position of Analyst IMS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Arena Star and Analyst IMS.

Diversification Opportunities for Arena Star and Analyst IMS

-0.81

Correlation Coefficient

Arena Star  Analyst IMS

Pay attention - limited upside

The 3 months correlation between Arena and Analyst is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Arena Star Group and Analyst IMS Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Analyst IMS Investment and Arena Star 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 Arena Star Group are associated (or correlated) with Analyst IMS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Analyst IMS Investment has no effect on the direction of Arena Star i.e., Arena Star and Analyst IMS go up and down completely randomly.

Pair Corralation between Arena Star and Analyst IMS

Assuming the 90 days trading horizon Arena Star Group is expected to generate 1.68 times more return on investment than Analyst IMS. However, Arena Star is 1.68 times more volatile than Analyst IMS Investment. It trades about -0.06 of its potential returns per unit of risk. Analyst IMS Investment is currently generating about -0.23 per unit of risk. If you would invest  22,650  in Arena Star Group on February 24, 2024 and sell it today you would lose (530.00) from holding Arena Star Group or give up 2.34% of portfolio value over 90 days.

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

Arena Star Group  vs.  Analyst IMS Investment

Arena Star Group

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Arena Star Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in June 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

Analyst IMS Investment

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Analyst IMS Investment are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Analyst IMS may actually be approaching a critical reversion point that can send shares even higher in June 2024.

Pair Trading with Arena Star and Analyst IMS

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

The idea behind Arena Star Group and Analyst IMS Investment 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.