Correlation Between First Farmers and STAR Financial

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

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

Diversification Opportunities for First Farmers and STAR Financial

0.0

Correlation Coefficient

First Farmers  STAR Financial

Pay attention - limited upside

The 3 months correlation between First and STAR is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding First Farmers and and STAR Financial Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STAR Financial Group and First Farmers 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 First Farmers and are associated (or correlated) with STAR Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of STAR Financial Group has no effect on the direction of First Farmers i.e., First Farmers and STAR Financial go up and down completely randomly.

Pair Corralation between First Farmers and STAR Financial

If you would invest  4,358  in First Farmers and on August 14, 2025 and sell it today you would earn a total of  342.00  from holding First Farmers and or generate 7.85% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

First Farmers and  vs.  STAR Financial Group

First Farmers

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in First Farmers and are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak primary indicators, First Farmers may actually be approaching a critical reversion point that can send shares even higher in December 2025.

STAR Financial Group

Risk-Adjusted Performance

Weakest

Over the last 90 days STAR Financial Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong technical and fundamental indicators, STAR Financial is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with First Farmers and STAR Financial

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

The idea behind First Farmers and and STAR Financial Group 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.