Correlation Between NewFlex Technology and Stic Investments
Can any of the company-specific risk be diversified away by investing in both NewFlex Technology and Stic Investments 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 NewFlex Technology and Stic Investments into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NewFlex Technology Co and Stic Investments, you can compare the effects of market volatilities on NewFlex Technology and Stic Investments 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 NewFlex Technology with a short position of Stic Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of NewFlex Technology and Stic Investments.
Diversification Opportunities for NewFlex Technology and Stic Investments
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between NewFlex and Stic is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding NewFlex Technology Co and Stic Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stic Investments and NewFlex 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 NewFlex Technology Co are associated (or correlated) with Stic Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stic Investments has no effect on the direction of NewFlex Technology i.e., NewFlex Technology and Stic Investments go up and down completely randomly.
Pair Corralation between NewFlex Technology and Stic Investments
Assuming the 90 days trading horizon NewFlex Technology Co is expected to under-perform the Stic Investments. In addition to that, NewFlex Technology is 1.2 times more volatile than Stic Investments. It trades about -0.26 of its total potential returns per unit of risk. Stic Investments is currently generating about 0.02 per unit of volatility. If you would invest 805,000 in Stic Investments on August 30, 2024 and sell it today you would earn a total of 2,000 from holding Stic Investments or generate 0.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NewFlex Technology Co vs. Stic Investments
Performance |
| Timeline |
| NewFlex Technology |
| Stic Investments |
NewFlex Technology and Stic Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NewFlex Technology and Stic Investments
The main advantage of trading using opposite NewFlex Technology and Stic Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NewFlex Technology position performs unexpectedly, Stic Investments 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 Stic Investments will offset losses from the drop in Stic Investments' long position.| NewFlex Technology vs. Daou Data Corp | NewFlex Technology vs. Busan Industrial Co | NewFlex Technology vs. Busan Ind | NewFlex Technology vs. Shinhan WTI Futures |
| Stic Investments vs. Daou Data Corp | Stic Investments vs. Busan Industrial Co | Stic Investments vs. Busan Ind | Stic Investments vs. Shinhan WTI Futures |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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