Correlation Between LS Starrett and LS Starrett

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

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

Diversification Opportunities for LS Starrett and LS Starrett

0.0

Correlation Coefficient

LS Starrett  LS Starrett

Pay attention - limited upside

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

Pair Corralation between LS Starrett and LS Starrett

If you would invest  1,100  in The LS Starrett on September 24, 2024 and sell it today you would earn a total of  0.00  from holding The LS Starrett or generate 0.0% return on investment over 90 days.

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

LS Starrett  vs.  The LS Starrett

LS Starrett

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days LS Starrett has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong fundamental indicators, LS Starrett is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

LS Starrett

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days The LS Starrett has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong essential indicators, LS Starrett is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with LS Starrett and LS Starrett

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

The idea behind LS Starrett and The LS Starrett 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.