Correlation Between Chroma ATE and Sinbon Electronics
Can any of the company-specific risk be diversified away by investing in both Chroma ATE and Sinbon Electronics 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 Chroma ATE and Sinbon Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chroma ATE and Sinbon Electronics Co, you can compare the effects of market volatilities on Chroma ATE and Sinbon Electronics 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 Chroma ATE with a short position of Sinbon Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chroma ATE and Sinbon Electronics.
Diversification Opportunities for Chroma ATE and Sinbon Electronics
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Chroma and Sinbon is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Chroma ATE and Sinbon Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sinbon Electronics and Chroma ATE 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 Chroma ATE are associated (or correlated) with Sinbon Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sinbon Electronics has no effect on the direction of Chroma ATE i.e., Chroma ATE and Sinbon Electronics go up and down completely randomly.
Pair Corralation between Chroma ATE and Sinbon Electronics
Assuming the 90 days trading horizon Chroma ATE is expected to generate 1.59 times more return on investment than Sinbon Electronics. However, Chroma ATE is 1.59 times more volatile than Sinbon Electronics Co. It trades about 0.08 of its potential returns per unit of risk. Sinbon Electronics Co is currently generating about -0.02 per unit of risk. If you would invest 19,050 in Chroma ATE on September 1, 2024 and sell it today you would earn a total of 22,200 from holding Chroma ATE or generate 116.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.78% |
| Values | Daily Returns |
Chroma ATE vs. Sinbon Electronics Co
Performance |
| Timeline |
| Chroma ATE |
| Sinbon Electronics |
Chroma ATE and Sinbon Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chroma ATE and Sinbon Electronics
The main advantage of trading using opposite Chroma ATE and Sinbon Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chroma ATE position performs unexpectedly, Sinbon Electronics 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 Sinbon Electronics will offset losses from the drop in Sinbon Electronics' long position.| Chroma ATE vs. Accton Technology Corp | Chroma ATE vs. Delta Electronics | Chroma ATE vs. Chicony Electronics Co | Chroma ATE vs. Advantech Co |
| Sinbon Electronics vs. Delta Electronics | Sinbon Electronics vs. Novatek Microelectronics Corp | Sinbon Electronics vs. Tripod Technology Corp | Sinbon Electronics vs. BizLink Holding |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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