Correlation Between STL Technology and Addcn Technology
Can any of the company-specific risk be diversified away by investing in both STL Technology and Addcn 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 STL Technology and Addcn Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between STL Technology Co and Addcn Technology Co, you can compare the effects of market volatilities on STL Technology and Addcn 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 STL Technology with a short position of Addcn Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of STL Technology and Addcn Technology.
Diversification Opportunities for STL Technology and Addcn Technology
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between STL and Addcn is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding STL Technology Co and Addcn Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Addcn Technology and STL Technology 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 STL Technology Co are associated (or correlated) with Addcn Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Addcn Technology has no effect on the direction of STL Technology i.e., STL Technology and Addcn Technology go up and down completely randomly.
Pair Corralation between STL Technology and Addcn Technology
Assuming the 90 days trading horizon STL Technology Co is expected to generate 8.06 times more return on investment than Addcn Technology. However, STL Technology is 8.06 times more volatile than Addcn Technology Co. It trades about 0.22 of its potential returns per unit of risk. Addcn Technology Co is currently generating about 0.03 per unit of risk. If you would invest 3,535 in STL Technology Co on September 24, 2024 and sell it today you would earn a total of 2,725 from holding STL Technology Co or generate 77.09% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 98.46% |
Values | Daily Returns |
STL Technology Co vs. Addcn Technology Co
Performance |
Timeline |
STL Technology |
Addcn Technology |
STL Technology and Addcn Technology Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with STL Technology and Addcn Technology
The main advantage of trading using opposite STL Technology and Addcn Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if STL Technology position performs unexpectedly, Addcn 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 Addcn Technology will offset losses from the drop in Addcn Technology's long position.STL Technology vs. Walsin Lihwa Corp | STL Technology vs. Voltronic Power Technology | STL Technology vs. Advanced Energy Solution | STL Technology vs. Simplo Technology Co |
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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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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