Correlation Between Senao International and D Link
Can any of the company-specific risk be diversified away by investing in both Senao International and D Link 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 Senao International and D Link into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Senao International Co and D Link Corp, you can compare the effects of market volatilities on Senao International and D Link 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 Senao International with a short position of D Link. Check out your portfolio center. Please also check ongoing floating volatility patterns of Senao International and D Link.
Diversification Opportunities for Senao International and D Link
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Senao and 2332 is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Senao International Co and D Link Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on D Link Corp and Senao International 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 Senao International Co are associated (or correlated) with D Link. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of D Link Corp has no effect on the direction of Senao International i.e., Senao International and D Link go up and down completely randomly.
Pair Corralation between Senao International and D Link
Assuming the 90 days trading horizon Senao International Co is expected to under-perform the D Link. But the stock apears to be less risky and, when comparing its historical volatility, Senao International Co is 2.27 times less risky than D Link. The stock trades about -0.01 of its potential returns per unit of risk. The D Link Corp is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 2,065 in D Link Corp on August 31, 2024 and sell it today you would earn a total of 110.00 from holding D Link Corp or generate 5.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.73% |
| Values | Daily Returns |
Senao International Co vs. D Link Corp
Performance |
| Timeline |
| Senao International |
| D Link Corp |
Senao International and D Link Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Senao International and D Link
The main advantage of trading using opposite Senao International and D Link positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Senao International position performs unexpectedly, D Link 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 D Link will offset losses from the drop in D Link's long position.| Senao International vs. Chaintech Technology Corp | Senao International vs. AVerMedia Technologies | Senao International vs. Avision | Senao International vs. Clevo Co |
| D Link vs. Accton Technology Corp | D Link vs. Compal Electronics | D Link vs. Qisda Corp | D Link vs. Macronix International 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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