Correlation Between STL Technology and Avalue Technology
Can any of the company-specific risk be diversified away by investing in both STL Technology and Avalue 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 Avalue 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 Avalue Technology, you can compare the effects of market volatilities on STL Technology and Avalue 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 Avalue Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of STL Technology and Avalue Technology.
Diversification Opportunities for STL Technology and Avalue Technology
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between STL and Avalue is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding STL Technology Co and Avalue Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Avalue 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 Avalue Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Avalue Technology has no effect on the direction of STL Technology i.e., STL Technology and Avalue Technology go up and down completely randomly.
Pair Corralation between STL Technology and Avalue Technology
Assuming the 90 days trading horizon STL Technology Co is expected to generate 1.15 times more return on investment than Avalue Technology. However, STL Technology is 1.15 times more volatile than Avalue Technology. It trades about 0.05 of its potential returns per unit of risk. Avalue Technology is currently generating about -0.01 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. Avalue Technology
Performance |
| Timeline |
| STL Technology |
| Avalue Technology |
STL Technology and Avalue Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with STL Technology and Avalue Technology
The main advantage of trading using opposite STL Technology and Avalue Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if STL Technology position performs unexpectedly, Avalue 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 Avalue Technology will offset losses from the drop in Avalue Technology'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 |
| Avalue Technology vs. Quanta Computer | Avalue Technology vs. Wiwynn Corp | Avalue Technology vs. Getac Technology Corp | Avalue Technology vs. InnoDisk |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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