Correlation Between STL Technology and Hiwin Technologies
Can any of the company-specific risk be diversified away by investing in both STL Technology and Hiwin Technologies 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 Hiwin Technologies 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 Hiwin Technologies Corp, you can compare the effects of market volatilities on STL Technology and Hiwin Technologies 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 Hiwin Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of STL Technology and Hiwin Technologies.
Diversification Opportunities for STL Technology and Hiwin Technologies
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between STL and Hiwin is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding STL Technology Co and Hiwin Technologies Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hiwin Technologies Corp 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 Hiwin Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hiwin Technologies Corp has no effect on the direction of STL Technology i.e., STL Technology and Hiwin Technologies go up and down completely randomly.
Pair Corralation between STL Technology and Hiwin Technologies
Assuming the 90 days trading horizon STL Technology Co is expected to generate 1.34 times more return on investment than Hiwin Technologies. However, STL Technology is 1.34 times more volatile than Hiwin Technologies Corp. It trades about 0.1 of its potential returns per unit of risk. Hiwin Technologies Corp is currently generating about 0.03 per unit of risk. If you would invest 6,370 in STL Technology Co on October 21, 2024 and sell it today you would earn a total of 480.00 from holding STL Technology Co or generate 7.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
STL Technology Co vs. Hiwin Technologies Corp
Performance |
| Timeline |
| STL Technology |
| Hiwin Technologies Corp |
STL Technology and Hiwin Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with STL Technology and Hiwin Technologies
The main advantage of trading using opposite STL Technology and Hiwin Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if STL Technology position performs unexpectedly, Hiwin Technologies 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 Hiwin Technologies will offset losses from the drop in Hiwin Technologies' long position.| STL Technology vs. Hiwin Technologies Corp | STL Technology vs. Kung Long Batteries | STL Technology vs. Airtac International Group | STL Technology vs. Fortune Electric Co |
| Hiwin Technologies vs. Basso Industry Corp | Hiwin Technologies vs. TYC Brother Industrial | Hiwin Technologies vs. Chung Hsin Electric Machinery | Hiwin Technologies vs. Kinik Co |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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