Correlation Between Stelar Metals and Spirit Technology

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

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

Diversification Opportunities for Stelar Metals and Spirit Technology

-0.52

Correlation Coefficient

Stelar Metals  Spirit Technology

Excellent diversification

The 3 months correlation between Stelar and Spirit is -0.52. Overlapping area represents the amount of risk that can be diversified away by holding Stelar Metals and Spirit Technology Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spirit Technology and Stelar Metals 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 Stelar Metals are associated (or correlated) with Spirit Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Spirit Technology has no effect on the direction of Stelar Metals i.e., Stelar Metals and Spirit Technology go up and down completely randomly.

Pair Corralation between Stelar Metals and Spirit Technology

Assuming the 90 days trading horizon Stelar Metals is expected to generate 6.76 times less return on investment than Spirit Technology. In addition to that, Stelar Metals is 1.33 times more volatile than Spirit Technology Solutions. It trades about 0.01 of its total potential returns per unit of risk. Spirit Technology Solutions is currently generating about 0.1 per unit of volatility. If you would invest  39.00  in Spirit Technology Solutions on April 25, 2025 and sell it today you would earn a total of  8.00  from holding Spirit Technology Solutions or generate 20.51% return on investment over 90 days.

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

Stelar Metals  vs.  Spirit Technology Solutions

Stelar Metals

Risk-Adjusted Performance

Very Weak

Over the last 90 days Stelar Metals has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable fundamental drivers, Stelar Metals is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Spirit Technology

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Spirit Technology Solutions are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Spirit Technology unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Stelar Metals and Spirit Technology

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

The idea behind Stelar Metals and Spirit Technology 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.

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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.