Correlation Between STL Technology and Voltronic Power
Can any of the company-specific risk be diversified away by investing in both STL Technology and Voltronic Power 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 Voltronic Power 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 Voltronic Power Technology, you can compare the effects of market volatilities on STL Technology and Voltronic Power 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 Voltronic Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of STL Technology and Voltronic Power.
Diversification Opportunities for STL Technology and Voltronic Power
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between STL and Voltronic is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding STL Technology Co and Voltronic Power Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Voltronic Power Tech 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 Voltronic Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Voltronic Power Tech has no effect on the direction of STL Technology i.e., STL Technology and Voltronic Power go up and down completely randomly.
Pair Corralation between STL Technology and Voltronic Power
Assuming the 90 days trading horizon STL Technology Co is expected to generate 2.02 times more return on investment than Voltronic Power. However, STL Technology is 2.02 times more volatile than Voltronic Power Technology. It trades about 0.24 of its potential returns per unit of risk. Voltronic Power Technology is currently generating about 0.09 per unit of risk. If you would invest 4,295 in STL Technology Co on September 13, 2024 and sell it today you would earn a total of 1,265 from holding STL Technology Co or generate 29.45% 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. Voltronic Power Technology
Performance |
| Timeline |
| STL Technology |
| Voltronic Power Tech |
STL Technology and Voltronic Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with STL Technology and Voltronic Power
The main advantage of trading using opposite STL Technology and Voltronic Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if STL Technology position performs unexpectedly, Voltronic Power 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 Voltronic Power will offset losses from the drop in Voltronic Power'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 |
| Voltronic Power vs. Advanced Energy Solution | Voltronic Power vs. Simplo Technology Co | Voltronic Power vs. Amtran Technology 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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