Correlation Between Sun Sea and STL Technology
Can any of the company-specific risk be diversified away by investing in both Sun Sea and STL 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 Sun Sea and STL Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sun Sea Construction and STL Technology Co, you can compare the effects of market volatilities on Sun Sea and STL 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 Sun Sea with a short position of STL Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sun Sea and STL Technology.
Diversification Opportunities for Sun Sea and STL Technology
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sun and STL is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Sun Sea Construction and STL Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STL Technology and Sun Sea 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 Sun Sea Construction are associated (or correlated) with STL Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of STL Technology has no effect on the direction of Sun Sea i.e., Sun Sea and STL Technology go up and down completely randomly.
Pair Corralation between Sun Sea and STL Technology
Assuming the 90 days trading horizon Sun Sea Construction is expected to under-perform the STL Technology. But the stock apears to be less risky and, when comparing its historical volatility, Sun Sea Construction is 1.12 times less risky than STL Technology. The stock trades about -0.05 of its potential returns per unit of risk. The STL Technology Co is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 4,256 in STL Technology Co on September 2, 2024 and sell it today you would earn a total of 1,794 from holding STL Technology Co or generate 42.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sun Sea Construction vs. STL Technology Co
Performance |
| Timeline |
| Sun Sea Construction |
| STL Technology |
Sun Sea and STL Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sun Sea and STL Technology
The main advantage of trading using opposite Sun Sea and STL Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sun Sea position performs unexpectedly, STL 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 STL Technology will offset losses from the drop in STL Technology's long position.| Sun Sea vs. Ruentex Development Co | Sun Sea vs. United Integrated Services | Sun Sea vs. CTCI Corp | Sun Sea vs. Continental Holdings Corp |
| 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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