Correlation Between Starbox Group and Intelligent Living

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

By analyzing existing cross correlation between Starbox Group Holdings and Intelligent Living Application, you can compare the effects of market volatilities on Starbox Group and Intelligent Living 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 Starbox Group with a short position of Intelligent Living. Check out your portfolio center. Please also check ongoing floating volatility patterns of Starbox Group and Intelligent Living.

Diversification Opportunities for Starbox Group and Intelligent Living

0.08

Correlation Coefficient

Starbox Group  Intelligent Living

Significant diversification

The 3 months correlation between Starbox and Intelligent is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Starbox Group Holdings and Intelligent Living Application in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intelligent Living and Starbox Group 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 Starbox Group Holdings are associated (or correlated) with Intelligent Living. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intelligent Living has no effect on the direction of Starbox Group i.e., Starbox Group and Intelligent Living go up and down completely randomly.

Pair Corralation between Starbox Group and Intelligent Living

Given the investment horizon of 90 days Starbox Group Holdings is expected to generate 1.75 times more return on investment than Intelligent Living. However, Starbox Group is 1.75 times more volatile than Intelligent Living Application. It trades about 0.37 of its potential returns per unit of risk. Intelligent Living Application is currently generating about -0.1 per unit of risk. If you would invest  124.00  in Starbox Group Holdings on September 22, 2024 and sell it today you would earn a total of  71.00  from holding Starbox Group Holdings or generate 57.26% return on investment over 90 days.

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

Starbox Group Holdings  vs.  Intelligent Living Application

Starbox Group Holdings

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Starbox Group Holdings are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating fundamental drivers, Starbox Group showed solid returns over the last few months and may actually be approaching a breakup point.

Intelligent Living

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Intelligent Living Application has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Starbox Group and Intelligent Living

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

The idea behind Starbox Group Holdings and Intelligent Living Application 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.