Correlation Between Visual Photonics and Sitronix Technology
Can any of the company-specific risk be diversified away by investing in both Visual Photonics 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 Visual Photonics and Sitronix Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Visual Photonics Epitaxy and Sitronix Technology Corp, you can compare the effects of market volatilities on Visual Photonics 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 Visual Photonics with a short position of Sitronix Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visual Photonics and Sitronix Technology.
Diversification Opportunities for Visual Photonics and Sitronix Technology
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Visual and Sitronix is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Visual Photonics Epitaxy 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 Visual Photonics 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 Visual Photonics Epitaxy 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 Visual Photonics i.e., Visual Photonics and Sitronix Technology go up and down completely randomly.
Pair Corralation between Visual Photonics and Sitronix Technology
Assuming the 90 days trading horizon Visual Photonics Epitaxy is expected to generate 2.5 times more return on investment than Sitronix Technology. However, Visual Photonics is 2.5 times more volatile than Sitronix Technology Corp. It trades about 0.27 of its potential returns per unit of risk. Sitronix Technology Corp is currently generating about -0.23 per unit of risk. If you would invest 14,100 in Visual Photonics Epitaxy on September 1, 2024 and sell it today you would earn a total of 2,900 from holding Visual Photonics Epitaxy or generate 20.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Visual Photonics Epitaxy vs. Sitronix Technology Corp
Performance |
| Timeline |
| Visual Photonics Epitaxy |
| Sitronix Technology Corp |
Visual Photonics and Sitronix Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visual Photonics and Sitronix Technology
The main advantage of trading using opposite Visual Photonics and Sitronix Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visual Photonics 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.| Visual Photonics vs. WIN Semiconductors | Visual Photonics vs. Advanced Wireless Semiconductor | Visual Photonics vs. Elan Microelectronics Corp | Visual Photonics vs. King Yuan Electronics |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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