Correlation Between Medigen Biotechnology and Silicon Power
Can any of the company-specific risk be diversified away by investing in both Medigen Biotechnology and Silicon Power 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 Medigen Biotechnology and Silicon Power into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Medigen Biotechnology and Silicon Power Computer, you can compare the effects of market volatilities on Medigen Biotechnology and Silicon Power 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 Medigen Biotechnology with a short position of Silicon Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Medigen Biotechnology and Silicon Power.
Diversification Opportunities for Medigen Biotechnology and Silicon Power
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Medigen and Silicon is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Medigen Biotechnology and Silicon Power Computer in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Silicon Power Computer and Medigen Biotechnology 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 Medigen Biotechnology are associated (or correlated) with Silicon Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Silicon Power Computer has no effect on the direction of Medigen Biotechnology i.e., Medigen Biotechnology and Silicon Power go up and down completely randomly.
Pair Corralation between Medigen Biotechnology and Silicon Power
Assuming the 90 days trading horizon Medigen Biotechnology is expected to generate 0.95 times more return on investment than Silicon Power. However, Medigen Biotechnology is 1.06 times less risky than Silicon Power. It trades about -0.08 of its potential returns per unit of risk. Silicon Power Computer is currently generating about -0.13 per unit of risk. If you would invest 4,325 in Medigen Biotechnology on August 30, 2024 and sell it today you would lose (910.00) from holding Medigen Biotechnology or give up 21.04% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Medigen Biotechnology vs. Silicon Power Computer
Performance |
| Timeline |
| Medigen Biotechnology |
| Silicon Power Computer |
Medigen Biotechnology and Silicon Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Medigen Biotechnology and Silicon Power
The main advantage of trading using opposite Medigen Biotechnology and Silicon Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Medigen Biotechnology position performs unexpectedly, Silicon Power 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 Silicon Power will offset losses from the drop in Silicon Power's long position.| Medigen Biotechnology vs. Sinphar Pharmaceutical Co | Medigen Biotechnology vs. Grape King Bio | Medigen Biotechnology vs. Apex Biotechnology Corp | Medigen Biotechnology vs. Leatec Fine Ceramics |
| Silicon Power vs. Qisda Corp | Silicon Power vs. Quanta Computer | Silicon Power vs. Coretronic | Silicon Power vs. Wistron Corp |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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