Correlation Between STHREE PLC and TechnoPro Holdings
Can any of the company-specific risk be diversified away by investing in both STHREE PLC and TechnoPro Holdings 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 STHREE PLC and TechnoPro Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between STHREE PLC LS and TechnoPro Holdings, you can compare the effects of market volatilities on STHREE PLC and TechnoPro Holdings 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 STHREE PLC with a short position of TechnoPro Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of STHREE PLC and TechnoPro Holdings.
Diversification Opportunities for STHREE PLC and TechnoPro Holdings
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between STHREE and TechnoPro is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding STHREE PLC LS and TechnoPro Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TechnoPro Holdings and STHREE PLC 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 STHREE PLC LS are associated (or correlated) with TechnoPro Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TechnoPro Holdings has no effect on the direction of STHREE PLC i.e., STHREE PLC and TechnoPro Holdings go up and down completely randomly.
Pair Corralation between STHREE PLC and TechnoPro Holdings
Assuming the 90 days horizon STHREE PLC LS is expected to generate 0.84 times more return on investment than TechnoPro Holdings. However, STHREE PLC LS is 1.2 times less risky than TechnoPro Holdings. It trades about -0.02 of its potential returns per unit of risk. TechnoPro Holdings is currently generating about -0.03 per unit of risk. If you would invest 458.00 in STHREE PLC LS on August 26, 2024 and sell it today you would lose (49.00) from holding STHREE PLC LS or give up 10.7% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
STHREE PLC LS vs. TechnoPro Holdings
Performance |
| Timeline |
| STHREE PLC LS |
| TechnoPro Holdings |
STHREE PLC and TechnoPro Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with STHREE PLC and TechnoPro Holdings
The main advantage of trading using opposite STHREE PLC and TechnoPro Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if STHREE PLC position performs unexpectedly, TechnoPro Holdings 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 TechnoPro Holdings will offset losses from the drop in TechnoPro Holdings' long position.| STHREE PLC vs. Tower One Wireless | STHREE PLC vs. Samsung Electronics Co | STHREE PLC vs. ARROW ELECTRONICS | STHREE PLC vs. Meiko Electronics Co |
| TechnoPro Holdings vs. Recruit Holdings Co | TechnoPro Holdings vs. Randstad NV | TechnoPro Holdings vs. Meitec | TechnoPro Holdings vs. STHREE PLC LS |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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