Correlation Between Sinbon Electronics and Flexium Interconnect
Can any of the company-specific risk be diversified away by investing in both Sinbon Electronics and Flexium Interconnect 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 Flexium Interconnect 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 Flexium Interconnect, you can compare the effects of market volatilities on Sinbon Electronics and Flexium Interconnect 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 Flexium Interconnect. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sinbon Electronics and Flexium Interconnect.
Diversification Opportunities for Sinbon Electronics and Flexium Interconnect
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Sinbon and Flexium is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Sinbon Electronics Co and Flexium Interconnect in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Flexium Interconnect 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 Flexium Interconnect. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Flexium Interconnect has no effect on the direction of Sinbon Electronics i.e., Sinbon Electronics and Flexium Interconnect go up and down completely randomly.
Pair Corralation between Sinbon Electronics and Flexium Interconnect
Assuming the 90 days trading horizon Sinbon Electronics Co is expected to generate 1.16 times more return on investment than Flexium Interconnect. However, Sinbon Electronics is 1.16 times more volatile than Flexium Interconnect. It trades about -0.02 of its potential returns per unit of risk. Flexium Interconnect is currently generating about -0.06 per unit of risk. If you would invest 31,350 in Sinbon Electronics Co on September 1, 2024 and sell it today you would lose (5,800) from holding Sinbon Electronics Co or give up 18.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.78% |
| Values | Daily Returns |
Sinbon Electronics Co vs. Flexium Interconnect
Performance |
| Timeline |
| Sinbon Electronics |
| Flexium Interconnect |
Sinbon Electronics and Flexium Interconnect Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sinbon Electronics and Flexium Interconnect
The main advantage of trading using opposite Sinbon Electronics and Flexium Interconnect positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sinbon Electronics position performs unexpectedly, Flexium Interconnect 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 Flexium Interconnect will offset losses from the drop in Flexium Interconnect'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 |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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