Correlation Between Sinbon Electronics and ALFORMER Industrial
Can any of the company-specific risk be diversified away by investing in both Sinbon Electronics and ALFORMER Industrial 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 Sinbon Electronics and ALFORMER Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sinbon Electronics Co and ALFORMER Industrial Co, you can compare the effects of market volatilities on Sinbon Electronics and ALFORMER Industrial 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 Sinbon Electronics with a short position of ALFORMER Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sinbon Electronics and ALFORMER Industrial.
Diversification Opportunities for Sinbon Electronics and ALFORMER Industrial
-0.86 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Sinbon and ALFORMER is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding Sinbon Electronics Co and ALFORMER Industrial Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ALFORMER Industrial and Sinbon 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 Sinbon Electronics Co are associated (or correlated) with ALFORMER Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ALFORMER Industrial has no effect on the direction of Sinbon Electronics i.e., Sinbon Electronics and ALFORMER Industrial go up and down completely randomly.
Pair Corralation between Sinbon Electronics and ALFORMER Industrial
Assuming the 90 days trading horizon Sinbon Electronics Co is expected to under-perform the ALFORMER Industrial. But the stock apears to be less risky and, when comparing its historical volatility, Sinbon Electronics Co is 1.56 times less risky than ALFORMER Industrial. The stock trades about -0.01 of its potential returns per unit of risk. The ALFORMER Industrial Co is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 2,292 in ALFORMER Industrial Co on September 4, 2024 and sell it today you would earn a total of 1,508 from holding ALFORMER Industrial Co or generate 65.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sinbon Electronics Co vs. ALFORMER Industrial Co
Performance |
| Timeline |
| Sinbon Electronics |
| ALFORMER Industrial |
Sinbon Electronics and ALFORMER Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sinbon Electronics and ALFORMER Industrial
The main advantage of trading using opposite Sinbon Electronics and ALFORMER Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sinbon Electronics position performs unexpectedly, ALFORMER Industrial 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 ALFORMER Industrial will offset losses from the drop in ALFORMER Industrial's long position.| Sinbon Electronics vs. Delta Electronics | Sinbon Electronics vs. Novatek Microelectronics Corp | Sinbon Electronics vs. Tripod Technology Corp | Sinbon Electronics vs. BizLink Holding |
| ALFORMER Industrial vs. Pontex Polyblend CoLtd | ALFORMER Industrial vs. Wah Hong Industrial | ALFORMER Industrial vs. Taishin Financial Holding | ALFORMER Industrial vs. EnTie Commercial Bank |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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