Correlation Between Delta Electronics and Sino American
Can any of the company-specific risk be diversified away by investing in both Delta Electronics and Sino American 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 Delta Electronics and Sino American into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Delta Electronics and Sino American Silicon Products, you can compare the effects of market volatilities on Delta Electronics and Sino American 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 Delta Electronics with a short position of Sino American. Check out your portfolio center. Please also check ongoing floating volatility patterns of Delta Electronics and Sino American.
Diversification Opportunities for Delta Electronics and Sino American
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Delta and Sino is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Delta Electronics and Sino American Silicon Products in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sino American Silicon and Delta Electronics 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 Delta Electronics are associated (or correlated) with Sino American. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sino American Silicon has no effect on the direction of Delta Electronics i.e., Delta Electronics and Sino American go up and down completely randomly.
Pair Corralation between Delta Electronics and Sino American
Assuming the 90 days trading horizon Delta Electronics is expected to under-perform the Sino American. But the stock apears to be less risky and, when comparing its historical volatility, Delta Electronics is 1.48 times less risky than Sino American. The stock trades about -0.06 of its potential returns per unit of risk. The Sino American Silicon Products is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 15,450 in Sino American Silicon Products on September 4, 2024 and sell it today you would earn a total of 250.00 from holding Sino American Silicon Products or generate 1.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Delta Electronics vs. Sino American Silicon Products
Performance |
| Timeline |
| Delta Electronics |
| Sino American Silicon |
Delta Electronics and Sino American Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Delta Electronics and Sino American
The main advantage of trading using opposite Delta Electronics and Sino American positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Delta Electronics position performs unexpectedly, Sino American 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 Sino American will offset losses from the drop in Sino American's long position.| Delta Electronics vs. Quanta Computer | Delta Electronics vs. Hon Hai Precision | Delta Electronics vs. United Microelectronics | Delta Electronics vs. LARGAN Precision Co |
| Sino American vs. WIN Semiconductors | Sino American vs. Delta Electronics | Sino American vs. WiseChip Semiconductor | Sino American vs. Novatek Microelectronics 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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