Correlation Between STL Technology and Posiflex Technology
Can any of the company-specific risk be diversified away by investing in both STL Technology and Posiflex 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 Posiflex 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 Posiflex Technology, you can compare the effects of market volatilities on STL Technology and Posiflex 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 Posiflex Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of STL Technology and Posiflex Technology.
Diversification Opportunities for STL Technology and Posiflex Technology
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between STL and Posiflex is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding STL Technology Co and Posiflex Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Posiflex 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 Posiflex Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Posiflex Technology has no effect on the direction of STL Technology i.e., STL Technology and Posiflex Technology go up and down completely randomly.
Pair Corralation between STL Technology and Posiflex Technology
Assuming the 90 days trading horizon STL Technology is expected to generate 2.87 times less return on investment than Posiflex Technology. In addition to that, STL Technology is 1.16 times more volatile than Posiflex Technology. It trades about 0.03 of its total potential returns per unit of risk. Posiflex Technology is currently generating about 0.11 per unit of volatility. If you would invest 11,450 in Posiflex Technology on September 5, 2024 and sell it today you would earn a total of 20,650 from holding Posiflex Technology or generate 180.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
STL Technology Co vs. Posiflex Technology
Performance |
| Timeline |
| STL Technology |
| Posiflex Technology |
STL Technology and Posiflex Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with STL Technology and Posiflex Technology
The main advantage of trading using opposite STL Technology and Posiflex Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if STL Technology position performs unexpectedly, Posiflex 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 Posiflex Technology will offset losses from the drop in Posiflex Technology's long position.| STL Technology vs. Eclat Textile Co | STL Technology vs. WiseChip Semiconductor | STL Technology vs. Novatek Microelectronics Corp | STL Technology vs. Leader Electronics |
| Posiflex Technology vs. Taiwan Semiconductor Manufacturing | Posiflex Technology vs. Yang Ming Marine | Posiflex Technology vs. AU Optronics | Posiflex Technology vs. Nan Ya Plastics |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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