Correlation Between STL Technology and Information Technology
Can any of the company-specific risk be diversified away by investing in both STL Technology and Information 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 Information 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 Information Technology Total, you can compare the effects of market volatilities on STL Technology and Information 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 Information Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of STL Technology and Information Technology.
Diversification Opportunities for STL Technology and Information Technology
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between STL and Information is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding STL Technology Co and Information Technology Total in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Information 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 Information Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Information Technology has no effect on the direction of STL Technology i.e., STL Technology and Information Technology go up and down completely randomly.
Pair Corralation between STL Technology and Information Technology
Assuming the 90 days trading horizon STL Technology Co is expected to generate 4.66 times more return on investment than Information Technology. However, STL Technology is 4.66 times more volatile than Information Technology Total. It trades about 0.09 of its potential returns per unit of risk. Information Technology Total is currently generating about -0.23 per unit of risk. If you would invest 6,440 in STL Technology Co on October 10, 2024 and sell it today you would earn a total of 540.00 from holding STL Technology Co or generate 8.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
STL Technology Co vs. Information Technology Total
Performance |
| Timeline |
| STL Technology |
| Information Technology |
STL Technology and Information Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with STL Technology and Information Technology
The main advantage of trading using opposite STL Technology and Information Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if STL Technology position performs unexpectedly, Information 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 Information Technology will offset losses from the drop in Information 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 |
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 Stocks Directory module to find actively traded stocks across global markets.
Other Complementary Tools
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years |