Correlation Between King Yuan and Sino American
Can any of the company-specific risk be diversified away by investing in both King Yuan 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 King Yuan and Sino American into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between King Yuan Electronics and Sino American Silicon Products, you can compare the effects of market volatilities on King Yuan 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 King Yuan with a short position of Sino American. Check out your portfolio center. Please also check ongoing floating volatility patterns of King Yuan and Sino American.
Diversification Opportunities for King Yuan and Sino American
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between King and Sino is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding King Yuan 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 King Yuan 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 King Yuan 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 King Yuan i.e., King Yuan and Sino American go up and down completely randomly.
Pair Corralation between King Yuan and Sino American
Assuming the 90 days trading horizon King Yuan Electronics is expected to under-perform the Sino American. In addition to that, King Yuan is 1.37 times more volatile than Sino American Silicon Products. It trades about -0.01 of its total potential returns per unit of risk. Sino American Silicon Products is currently generating about 0.05 per unit of volatility. 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 | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
King Yuan Electronics vs. Sino American Silicon Products
Performance |
| Timeline |
| King Yuan Electronics |
| Sino American Silicon |
King Yuan and Sino American Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with King Yuan and Sino American
The main advantage of trading using opposite King Yuan and Sino American positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if King Yuan 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.| King Yuan vs. Taiwan Semiconductor Manufacturing | King Yuan vs. Yang Ming Marine | King Yuan vs. AU Optronics | King Yuan vs. Innolux Corp |
| 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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