Correlation Between Nan Ya and Stark Technology
Can any of the company-specific risk be diversified away by investing in both Nan Ya and Stark 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 Nan Ya and Stark Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nan Ya Plastics and Stark Technology, you can compare the effects of market volatilities on Nan Ya and Stark 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 Nan Ya with a short position of Stark Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nan Ya and Stark Technology.
Diversification Opportunities for Nan Ya and Stark Technology
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Nan and Stark is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Nan Ya Plastics and Stark Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stark Technology and Nan Ya 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 Nan Ya Plastics are associated (or correlated) with Stark Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stark Technology has no effect on the direction of Nan Ya i.e., Nan Ya and Stark Technology go up and down completely randomly.
Pair Corralation between Nan Ya and Stark Technology
Assuming the 90 days trading horizon Nan Ya Plastics is expected to under-perform the Stark Technology. But the stock apears to be less risky and, when comparing its historical volatility, Nan Ya Plastics is 1.06 times less risky than Stark Technology. The stock trades about -0.09 of its potential returns per unit of risk. The Stark Technology is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 8,300 in Stark Technology on September 5, 2024 and sell it today you would earn a total of 4,250 from holding Stark Technology or generate 51.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Nan Ya Plastics vs. Stark Technology
Performance |
| Timeline |
| Nan Ya Plastics |
| Stark Technology |
Nan Ya and Stark Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nan Ya and Stark Technology
The main advantage of trading using opposite Nan Ya and Stark Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nan Ya position performs unexpectedly, Stark 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 Stark Technology will offset losses from the drop in Stark Technology's long position.The idea behind Nan Ya Plastics and Stark 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.| Stark Technology vs. Micro Star International Co | Stark Technology vs. Synnex Technology International | Stark Technology vs. Gigabyte Technology Co | Stark Technology vs. Realtek Semiconductor 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 Stocks Directory module to find actively traded stocks across global markets.
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