Correlation Between Star8 Corp and Defentect

Can any of the company-specific risk be diversified away by investing in both Star8 Corp and Defentect 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 Star8 Corp and Defentect into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Star8 Corp and Defentect Group, you can compare the effects of market volatilities on Star8 Corp and Defentect 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 Star8 Corp with a short position of Defentect. Check out your portfolio center. Please also check ongoing floating volatility patterns of Star8 Corp and Defentect.

Diversification Opportunities for Star8 Corp and Defentect

0.3

Correlation Coefficient

Star8 Corp  Defentect

Weak diversification

The 3 months correlation between Star8 and Defentect is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Star8 Corp and Defentect Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Defentect Group and Star8 Corp 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 Star8 Corp are associated (or correlated) with Defentect. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Defentect Group has no effect on the direction of Star8 Corp i.e., Star8 Corp and Defentect go up and down completely randomly.

Pair Corralation between Star8 Corp and Defentect

Given the investment horizon of 90 days Star8 Corp is expected to generate 1.52 times more return on investment than Defentect. However, Star8 Corp is 1.52 times more volatile than Defentect Group. It trades about 0.0 of its potential returns per unit of risk. Defentect Group is currently generating about 0.0 per unit of risk. If you would invest  2.39  in Star8 Corp on April 24, 2025 and sell it today you would lose (0.55) from holding Star8 Corp or give up 23.01% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.41%
Values	Daily Returns

Star8 Corp  vs.  Defentect Group

Star8 Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Star8 Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Star8 Corp is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Defentect Group

Risk-Adjusted Performance

Weak

Over the last 90 days Defentect Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Defentect is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Star8 Corp and Defentect

The main advantage of trading using opposite Star8 Corp and Defentect positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Star8 Corp position performs unexpectedly, Defentect 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 Defentect will offset losses from the drop in Defentect's long position.

The idea behind Star8 Corp and Defentect 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.

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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 Valuation module to check real value of public entities based on technical and fundamental data.