Correlation Between Chroma ATE and Sitronix Technology
Can any of the company-specific risk be diversified away by investing in both Chroma ATE and Sitronix 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 Chroma ATE and Sitronix Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chroma ATE and Sitronix Technology Corp, you can compare the effects of market volatilities on Chroma ATE and Sitronix 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 Chroma ATE with a short position of Sitronix Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chroma ATE and Sitronix Technology.
Diversification Opportunities for Chroma ATE and Sitronix Technology
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Chroma and Sitronix is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Chroma ATE and Sitronix Technology Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sitronix Technology Corp 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 Sitronix Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sitronix Technology Corp has no effect on the direction of Chroma ATE i.e., Chroma ATE and Sitronix Technology go up and down completely randomly.
Pair Corralation between Chroma ATE and Sitronix Technology
Assuming the 90 days trading horizon Chroma ATE is expected to generate 1.54 times more return on investment than Sitronix Technology. However, Chroma ATE is 1.54 times more volatile than Sitronix Technology Corp. It trades about 0.09 of its potential returns per unit of risk. Sitronix Technology Corp is currently generating about -0.1 per unit of risk. If you would invest 26,500 in Chroma ATE on September 1, 2024 and sell it today you would earn a total of 14,750 from holding Chroma ATE or generate 55.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chroma ATE vs. Sitronix Technology Corp
Performance |
| Timeline |
| Chroma ATE |
| Sitronix Technology Corp |
Chroma ATE and Sitronix Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chroma ATE and Sitronix Technology
The main advantage of trading using opposite Chroma ATE and Sitronix Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chroma ATE position performs unexpectedly, Sitronix 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 Sitronix Technology will offset losses from the drop in Sitronix Technology's long position.| Chroma ATE vs. Accton Technology Corp | Chroma ATE vs. Delta Electronics | Chroma ATE vs. Chicony Electronics Co | Chroma ATE vs. Advantech Co |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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