Correlation Between TLOS and Stargate Finance

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

By analyzing existing cross correlation between TLOS and Stargate Finance, you can compare the effects of market volatilities on TLOS and Stargate Finance 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 TLOS with a short position of Stargate Finance. Check out your portfolio center. Please also check ongoing floating volatility patterns of TLOS and Stargate Finance.

Diversification Opportunities for TLOS and Stargate Finance

-0.14

Correlation Coefficient

TLOS  Stargate Finance

Good diversification

The 3 months correlation between TLOS and Stargate is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding TLOS and Stargate Finance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stargate Finance and TLOS 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 TLOS are associated (or correlated) with Stargate Finance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stargate Finance has no effect on the direction of TLOS i.e., TLOS and Stargate Finance go up and down completely randomly.

Pair Corralation between TLOS and Stargate Finance

Assuming the 90 days trading horizon TLOS is expected to under-perform the Stargate Finance. But the crypto coin apears to be less risky and, when comparing its historical volatility, TLOS is 1.14 times less risky than Stargate Finance. The crypto coin trades about -0.02 of its potential returns per unit of risk. The Stargate Finance is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  28.00  in Stargate Finance on September 3, 2024 and sell it today you would earn a total of  12.00  from holding Stargate Finance or generate 42.86% return on investment over 90 days.

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

TLOS  vs.  Stargate Finance

TLOS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days TLOS has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental indicators, TLOS is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Stargate Finance

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Stargate Finance are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Stargate Finance exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with TLOS and Stargate Finance

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

The idea behind TLOS and Stargate Finance 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.