Correlation Between Emerging Display and Sitronix Technology
Can any of the company-specific risk be diversified away by investing in both Emerging Display 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 Emerging Display and Sitronix Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Emerging Display Technologies and Sitronix Technology Corp, you can compare the effects of market volatilities on Emerging Display 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 Emerging Display with a short position of Sitronix Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Emerging Display and Sitronix Technology.
Diversification Opportunities for Emerging Display and Sitronix Technology
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Emerging and Sitronix is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Emerging Display Technologies 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 Emerging Display 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 Emerging Display Technologies 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 Emerging Display i.e., Emerging Display and Sitronix Technology go up and down completely randomly.
Pair Corralation between Emerging Display and Sitronix Technology
Assuming the 90 days trading horizon Emerging Display Technologies is expected to generate 0.87 times more return on investment than Sitronix Technology. However, Emerging Display Technologies is 1.14 times less risky than Sitronix Technology. It trades about -0.08 of its potential returns per unit of risk. Sitronix Technology Corp is currently generating about -0.1 per unit of risk. If you would invest 3,255 in Emerging Display Technologies on September 3, 2024 and sell it today you would lose (565.00) from holding Emerging Display Technologies or give up 17.36% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Emerging Display Technologies vs. Sitronix Technology Corp
Performance |
| Timeline |
| Emerging Display Tec |
| Sitronix Technology Corp |
Emerging Display and Sitronix Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Emerging Display and Sitronix Technology
The main advantage of trading using opposite Emerging Display and Sitronix Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Emerging Display 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.| Emerging Display vs. Taiwan Semiconductor Manufacturing | Emerging Display vs. Yang Ming Marine | Emerging Display vs. ASE Industrial Holding | Emerging Display vs. AU Optronics |
| Sitronix Technology vs. Taiwan Semiconductor Manufacturing | Sitronix Technology vs. Yang Ming Marine | Sitronix Technology vs. ASE Industrial Holding | Sitronix Technology vs. AU Optronics |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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