Correlation Between STL Technology and FarGlory Hotel
Can any of the company-specific risk be diversified away by investing in both STL Technology and FarGlory Hotel 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 FarGlory Hotel 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 FarGlory Hotel Co, you can compare the effects of market volatilities on STL Technology and FarGlory Hotel 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 FarGlory Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of STL Technology and FarGlory Hotel.
Diversification Opportunities for STL Technology and FarGlory Hotel
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between STL and FarGlory is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding STL Technology Co and FarGlory Hotel Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FarGlory Hotel 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 FarGlory Hotel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FarGlory Hotel has no effect on the direction of STL Technology i.e., STL Technology and FarGlory Hotel go up and down completely randomly.
Pair Corralation between STL Technology and FarGlory Hotel
Assuming the 90 days trading horizon STL Technology Co is expected to generate 1.61 times more return on investment than FarGlory Hotel. However, STL Technology is 1.61 times more volatile than FarGlory Hotel Co. It trades about 0.05 of its potential returns per unit of risk. FarGlory Hotel Co is currently generating about -0.08 per unit of risk. If you would invest 4,256 in STL Technology Co on September 2, 2024 and sell it today you would earn a total of 1,794 from holding STL Technology Co or generate 42.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
STL Technology Co vs. FarGlory Hotel Co
Performance |
| Timeline |
| STL Technology |
| FarGlory Hotel |
STL Technology and FarGlory Hotel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with STL Technology and FarGlory Hotel
The main advantage of trading using opposite STL Technology and FarGlory Hotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if STL Technology position performs unexpectedly, FarGlory Hotel 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 FarGlory Hotel will offset losses from the drop in FarGlory Hotel's long position.| STL Technology vs. Simplo Technology Co | STL Technology vs. Dynapack International Technology | STL Technology vs. Celxpert Energy | STL Technology vs. C Tech United |
| FarGlory Hotel vs. Ambassador Hotel | FarGlory Hotel vs. Lion Travel Service | FarGlory Hotel vs. Chateau International Development | FarGlory Hotel vs. First Hotel 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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