Correlation Between Stellar and SALT

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

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

Diversification Opportunities for Stellar and SALT

-0.43

Correlation Coefficient

Stellar  SALT

Very good diversification

The 3 months correlation between Stellar and SALT is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Stellar and SALT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SALT and Stellar 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 are associated (or correlated) with SALT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SALT has no effect on the direction of Stellar i.e., Stellar and SALT go up and down completely randomly.

Pair Corralation between Stellar and SALT

If you would invest  25.00  in Stellar on April 22, 2025 and sell it today you would earn a total of  21.00  from holding Stellar or generate 84.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	4.76%
Values	Daily Returns

Stellar  vs.  SALT

Stellar

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Stellar are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady primary indicators, Stellar exhibited solid returns over the last few months and may actually be approaching a breakup point.

SALT

Risk-Adjusted Performance

Excellent

Over the last 90 days SALT has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather unsteady fundamental indicators, SALT may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Stellar and SALT

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

The idea behind Stellar and SALT 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..