Correlation Between Stellar Bancorp, and Foreign Trade

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

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

Diversification Opportunities for Stellar Bancorp, and Foreign Trade

0.45

Correlation Coefficient

Stellar Bancorp,  Foreign Trade

Very weak diversification

The 3 months correlation between Stellar and Foreign is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Stellar Bancorp, and Foreign Trade Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Foreign Trade Bank and Stellar Bancorp, 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 Stellar Bancorp, are associated (or correlated) with Foreign Trade. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Foreign Trade Bank has no effect on the direction of Stellar Bancorp, i.e., Stellar Bancorp, and Foreign Trade go up and down completely randomly.

Pair Corralation between Stellar Bancorp, and Foreign Trade

Given the investment horizon of 90 days Stellar Bancorp, is expected to under-perform the Foreign Trade. In addition to that, Stellar Bancorp, is 2.2 times more volatile than Foreign Trade Bank. It trades about -0.06 of its total potential returns per unit of risk. Foreign Trade Bank is currently generating about -0.12 per unit of volatility. If you would invest  4,680  in Foreign Trade Bank on July 26, 2025 and sell it today you would lose (120.00) from holding Foreign Trade Bank or give up 2.56% of portfolio value over 90 days.

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

Stellar Bancorp,  vs.  Foreign Trade Bank

Stellar Bancorp,

Risk-Adjusted Performance

Weakest

Over the last 90 days Stellar Bancorp, has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent technical and fundamental indicators, Stellar Bancorp, is not utilizing all of its potentials. The recent stock price mess, may contribute to short-term losses for the institutional investors.

Foreign Trade Bank

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Foreign Trade Bank are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating essential indicators, Foreign Trade showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Stellar Bancorp, and Foreign Trade

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

The idea behind Stellar Bancorp, and Foreign Trade Bank 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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.