Correlation Between STL Technology and Sports Gear
Can any of the company-specific risk be diversified away by investing in both STL Technology and Sports Gear 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 Sports Gear 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 Sports Gear Co, you can compare the effects of market volatilities on STL Technology and Sports Gear 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 Sports Gear. Check out your portfolio center. Please also check ongoing floating volatility patterns of STL Technology and Sports Gear.
Diversification Opportunities for STL Technology and Sports Gear
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between STL and Sports is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding STL Technology Co and Sports Gear Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sports Gear 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 Sports Gear. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sports Gear has no effect on the direction of STL Technology i.e., STL Technology and Sports Gear go up and down completely randomly.
Pair Corralation between STL Technology and Sports Gear
Assuming the 90 days trading horizon STL Technology Co is expected to generate 3.16 times more return on investment than Sports Gear. However, STL Technology is 3.16 times more volatile than Sports Gear Co. It trades about -0.02 of its potential returns per unit of risk. Sports Gear Co is currently generating about -0.34 per unit of risk. If you would invest 7,150 in STL Technology Co on October 7, 2024 and sell it today you would lose (450.00) from holding STL Technology Co or give up 6.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
STL Technology Co vs. Sports Gear Co
Performance |
| Timeline |
| STL Technology |
| Sports Gear |
STL Technology and Sports Gear Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with STL Technology and Sports Gear
The main advantage of trading using opposite STL Technology and Sports Gear positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if STL Technology position performs unexpectedly, Sports Gear 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 Sports Gear will offset losses from the drop in Sports Gear'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 |
| Sports Gear vs. Sunny Friend Environmental | Sports Gear vs. Cleanaway Co | Sports Gear vs. Charoen Pokphand Enterprise | Sports Gear vs. TTET Union Corp |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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