Correlation Between Stardust Power and Element Solutions

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

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

Diversification Opportunities for Stardust Power and Element Solutions

-0.22

Correlation Coefficient

Stardust Power  Element Solutions

Very good diversification

The 3 months correlation between Stardust and Element is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Stardust Power and Element Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Element Solutions and Stardust Power 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 Stardust Power are associated (or correlated) with Element Solutions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Element Solutions has no effect on the direction of Stardust Power i.e., Stardust Power and Element Solutions go up and down completely randomly.

Pair Corralation between Stardust Power and Element Solutions

Assuming the 90 days horizon Stardust Power is expected to generate 9.24 times more return on investment than Element Solutions. However, Stardust Power is 9.24 times more volatile than Element Solutions. It trades about 0.1 of its potential returns per unit of risk. Element Solutions is currently generating about 0.12 per unit of risk. If you would invest  6.25  in Stardust Power on May 3, 2025 and sell it today you would earn a total of  1.73  from holding Stardust Power or generate 27.68% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.36%
Values	Daily Returns

Stardust Power  vs.  Element Solutions

Stardust Power

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Stardust Power are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating basic indicators, Stardust Power showed solid returns over the last few months and may actually be approaching a breakup point.

Element Solutions

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Element Solutions are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite fairly unsteady basic indicators, Element Solutions demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Stardust Power and Element Solutions

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

The idea behind Stardust Power and Element Solutions 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.