Correlation Between STL Technology and Taiwan Taomee
Can any of the company-specific risk be diversified away by investing in both STL Technology and Taiwan Taomee 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 Taiwan Taomee 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 Taiwan Taomee Co, you can compare the effects of market volatilities on STL Technology and Taiwan Taomee 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 Taiwan Taomee. Check out your portfolio center. Please also check ongoing floating volatility patterns of STL Technology and Taiwan Taomee.
Diversification Opportunities for STL Technology and Taiwan Taomee
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between STL and Taiwan is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding STL Technology Co and Taiwan Taomee Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Taiwan Taomee 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 Taiwan Taomee. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Taiwan Taomee has no effect on the direction of STL Technology i.e., STL Technology and Taiwan Taomee go up and down completely randomly.
Pair Corralation between STL Technology and Taiwan Taomee
Assuming the 90 days trading horizon STL Technology Co is expected to generate 4.16 times more return on investment than Taiwan Taomee. However, STL Technology is 4.16 times more volatile than Taiwan Taomee Co. It trades about 0.32 of its potential returns per unit of risk. Taiwan Taomee Co is currently generating about 0.04 per unit of risk. If you would invest 3,905 in STL Technology Co on September 12, 2024 and sell it today you would earn a total of 1,895 from holding STL Technology Co or generate 48.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
STL Technology Co vs. Taiwan Taomee Co
Performance |
| Timeline |
| STL Technology |
| Taiwan Taomee |
STL Technology and Taiwan Taomee Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with STL Technology and Taiwan Taomee
The main advantage of trading using opposite STL Technology and Taiwan Taomee positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if STL Technology position performs unexpectedly, Taiwan Taomee 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 Taiwan Taomee will offset losses from the drop in Taiwan Taomee's long position.| STL Technology vs. Voltronic Power Technology | STL Technology vs. Advanced Energy Solution | STL Technology vs. Simplo Technology Co | STL Technology vs. Amtran Technology Co |
| Taiwan Taomee vs. Taishin Financial Holding | Taiwan Taomee vs. PChome Online | Taiwan Taomee vs. Fubon Financial Holding | Taiwan Taomee vs. Hua Nan Financial |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
Other Complementary Tools
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Commodity Directory Find actively traded commodities issued by global exchanges |