Correlation Between Greatek Electronics and Sigurd Microelectronics
Can any of the company-specific risk be diversified away by investing in both Greatek Electronics and Sigurd Microelectronics 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 Greatek Electronics and Sigurd Microelectronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Greatek Electronics and Sigurd Microelectronics Corp, you can compare the effects of market volatilities on Greatek Electronics and Sigurd Microelectronics 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 Greatek Electronics with a short position of Sigurd Microelectronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Greatek Electronics and Sigurd Microelectronics.
Diversification Opportunities for Greatek Electronics and Sigurd Microelectronics
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Greatek and Sigurd is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Greatek Electronics and Sigurd Microelectronics Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sigurd Microelectronics and Greatek 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 Greatek Electronics are associated (or correlated) with Sigurd Microelectronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sigurd Microelectronics has no effect on the direction of Greatek Electronics i.e., Greatek Electronics and Sigurd Microelectronics go up and down completely randomly.
Pair Corralation between Greatek Electronics and Sigurd Microelectronics
Assuming the 90 days trading horizon Greatek Electronics is expected to generate 0.8 times more return on investment than Sigurd Microelectronics. However, Greatek Electronics is 1.24 times less risky than Sigurd Microelectronics. It trades about -0.05 of its potential returns per unit of risk. Sigurd Microelectronics Corp is currently generating about -0.23 per unit of risk. If you would invest 5,770 in Greatek Electronics on August 31, 2024 and sell it today you would lose (80.00) from holding Greatek Electronics or give up 1.39% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Greatek Electronics vs. Sigurd Microelectronics Corp
Performance |
| Timeline |
| Greatek Electronics |
| Sigurd Microelectronics |
Greatek Electronics and Sigurd Microelectronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Greatek Electronics and Sigurd Microelectronics
The main advantage of trading using opposite Greatek Electronics and Sigurd Microelectronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Greatek Electronics position performs unexpectedly, Sigurd Microelectronics 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 Sigurd Microelectronics will offset losses from the drop in Sigurd Microelectronics' long position.| Greatek Electronics vs. United Microelectronics | Greatek Electronics vs. Winbond Electronics Corp | Greatek Electronics vs. Macronix International Co |
| Sigurd Microelectronics vs. King Yuan Electronics | Sigurd Microelectronics vs. Powertech Technology | Sigurd Microelectronics vs. Greatek Electronics | Sigurd Microelectronics vs. Sitronix Technology 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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