Correlation Between Orient Semiconductor and Sun Sea
Can any of the company-specific risk be diversified away by investing in both Orient Semiconductor and Sun Sea 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 Orient Semiconductor and Sun Sea into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Orient Semiconductor Electronics and Sun Sea Construction, you can compare the effects of market volatilities on Orient Semiconductor and Sun Sea 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 Orient Semiconductor with a short position of Sun Sea. Check out your portfolio center. Please also check ongoing floating volatility patterns of Orient Semiconductor and Sun Sea.
Diversification Opportunities for Orient Semiconductor and Sun Sea
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Orient and Sun is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Orient Semiconductor Electroni and Sun Sea Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sun Sea Construction and Orient Semiconductor 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 Orient Semiconductor Electronics are associated (or correlated) with Sun Sea. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sun Sea Construction has no effect on the direction of Orient Semiconductor i.e., Orient Semiconductor and Sun Sea go up and down completely randomly.
Pair Corralation between Orient Semiconductor and Sun Sea
Assuming the 90 days trading horizon Orient Semiconductor Electronics is expected to under-perform the Sun Sea. In addition to that, Orient Semiconductor is 1.65 times more volatile than Sun Sea Construction. It trades about -0.09 of its total potential returns per unit of risk. Sun Sea Construction is currently generating about 0.0 per unit of volatility. If you would invest 1,995 in Sun Sea Construction on November 3, 2024 and sell it today you would lose (105.00) from holding Sun Sea Construction or give up 5.26% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Orient Semiconductor Electroni vs. Sun Sea Construction
Performance |
| Timeline |
| Orient Semiconductor |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Sun Sea Construction |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
OK
Orient Semiconductor and Sun Sea Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Orient Semiconductor and Sun Sea
The main advantage of trading using opposite Orient Semiconductor and Sun Sea positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Orient Semiconductor position performs unexpectedly, Sun Sea 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 Sun Sea will offset losses from the drop in Sun Sea's long position.The idea behind Orient Semiconductor Electronics and Sun Sea Construction 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.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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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