Correlation Between STL Technology and Integrated Service
Can any of the company-specific risk be diversified away by investing in both STL Technology and Integrated Service 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 Integrated Service 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 Integrated Service Technology, you can compare the effects of market volatilities on STL Technology and Integrated Service 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 Integrated Service. Check out your portfolio center. Please also check ongoing floating volatility patterns of STL Technology and Integrated Service.
Diversification Opportunities for STL Technology and Integrated Service
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between STL and Integrated is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding STL Technology Co and Integrated Service Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Integrated Service 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 Integrated Service. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Integrated Service has no effect on the direction of STL Technology i.e., STL Technology and Integrated Service go up and down completely randomly.
Pair Corralation between STL Technology and Integrated Service
Assuming the 90 days trading horizon STL Technology is expected to generate 1.39 times less return on investment than Integrated Service. But when comparing it to its historical volatility, STL Technology Co is 1.24 times less risky than Integrated Service. It trades about 0.05 of its potential returns per unit of risk. Integrated Service Technology is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 8,922 in Integrated Service Technology on September 2, 2024 and sell it today you would earn a total of 5,378 from holding Integrated Service Technology or generate 60.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.73% |
| Values | Daily Returns |
STL Technology Co vs. Integrated Service Technology
Performance |
| Timeline |
| STL Technology |
| Integrated Service |
STL Technology and Integrated Service Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with STL Technology and Integrated Service
The main advantage of trading using opposite STL Technology and Integrated Service positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if STL Technology position performs unexpectedly, Integrated Service 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 Integrated Service will offset losses from the drop in Integrated Service'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 |
| Integrated Service vs. Standard Foods Corp | Integrated Service vs. Sunny Friend Environmental | Integrated Service vs. Wei Chuan Foods | Integrated Service vs. Wei Chih Steel |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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