Correlation Between STAR Financial and Solvay Bank

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

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

Diversification Opportunities for STAR Financial and Solvay Bank

0.0

Correlation Coefficient

STAR Financial  Solvay Bank

Pay attention - limited upside

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

Pair Corralation between STAR Financial and Solvay Bank

If you would invest  2,822  in Solvay Bank Corp on April 25, 2025 and sell it today you would earn a total of  34.00  from holding Solvay Bank Corp or generate 1.2% return on investment over 90 days.

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

STAR Financial Group  vs.  Solvay Bank Corp

STAR Financial Group

Risk-Adjusted Performance

Very Weak

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.

Solvay Bank Corp

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Solvay Bank Corp are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable fundamental drivers, Solvay Bank is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with STAR Financial and Solvay Bank

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

The idea behind STAR Financial Group and Solvay Bank Corp 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.