Correlation Between Stabilis Solutions and Recon Technology

Can any of the company-specific risk be diversified away by investing in both Stabilis Solutions and Recon 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 Stabilis Solutions and Recon Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Stabilis Solutions and Recon Technology, you can compare the effects of market volatilities on Stabilis Solutions and Recon 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 Stabilis Solutions with a short position of Recon Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Stabilis Solutions and Recon Technology.

Diversification Opportunities for Stabilis Solutions and Recon Technology

0.09

Correlation Coefficient

Stabilis Solutions  Recon Technology

Significant diversification

The 3 months correlation between Stabilis and Recon is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Stabilis Solutions and Recon Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Recon Technology and Stabilis Solutions 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 Stabilis Solutions are associated (or correlated) with Recon Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Recon Technology has no effect on the direction of Stabilis Solutions i.e., Stabilis Solutions and Recon Technology go up and down completely randomly.

Pair Corralation between Stabilis Solutions and Recon Technology

Given the investment horizon of 90 days Stabilis Solutions is expected to generate 0.39 times more return on investment than Recon Technology. However, Stabilis Solutions is 2.58 times less risky than Recon Technology. It trades about 0.02 of its potential returns per unit of risk. Recon Technology is currently generating about -0.01 per unit of risk. If you would invest  479.00  in Stabilis Solutions on July 27, 2025 and sell it today you would lose (1.00) from holding Stabilis Solutions or give up 0.21% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Stabilis Solutions  vs.  Recon Technology

Stabilis Solutions

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Stabilis Solutions are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Stabilis Solutions is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Recon Technology

Risk-Adjusted Performance

Weakest

Over the last 90 days Recon Technology has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Stabilis Solutions and Recon Technology

The main advantage of trading using opposite Stabilis Solutions and Recon Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Stabilis Solutions position performs unexpectedly, Recon 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 Recon Technology will offset losses from the drop in Recon Technology's long position.

The idea behind Stabilis Solutions and Recon Technology pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.