Correlation Between Sinbon Electronics and Chia Chang
Can any of the company-specific risk be diversified away by investing in both Sinbon Electronics and Chia Chang 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 Chia Chang 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 Chia Chang Co, you can compare the effects of market volatilities on Sinbon Electronics and Chia Chang 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 Chia Chang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sinbon Electronics and Chia Chang.
Diversification Opportunities for Sinbon Electronics and Chia Chang
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sinbon and Chia is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Sinbon Electronics Co and Chia Chang Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chia Chang 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 Chia Chang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chia Chang has no effect on the direction of Sinbon Electronics i.e., Sinbon Electronics and Chia Chang go up and down completely randomly.
Pair Corralation between Sinbon Electronics and Chia Chang
Assuming the 90 days trading horizon Sinbon Electronics Co is expected to under-perform the Chia Chang. In addition to that, Sinbon Electronics is 1.71 times more volatile than Chia Chang Co. It trades about -0.01 of its total potential returns per unit of risk. Chia Chang Co is currently generating about 0.04 per unit of volatility. If you would invest 3,465 in Chia Chang Co on October 25, 2024 and sell it today you would earn a total of 585.00 from holding Chia Chang Co or generate 16.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sinbon Electronics Co vs. Chia Chang Co
Performance |
| Timeline |
| Sinbon Electronics |
| Chia Chang |
Sinbon Electronics and Chia Chang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sinbon Electronics and Chia Chang
The main advantage of trading using opposite Sinbon Electronics and Chia Chang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sinbon Electronics position performs unexpectedly, Chia Chang 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 Chia Chang will offset losses from the drop in Chia Chang'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 |
| Chia Chang vs. FSP Technology | Chia Chang vs. HannStar Board Corp | Chia Chang vs. Taiwan Surface Mounting | Chia Chang vs. Emerging Display Technologies |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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