Correlation Between Sentronic International and Camellia Metal
Can any of the company-specific risk be diversified away by investing in both Sentronic International and Camellia Metal 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 Sentronic International and Camellia Metal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sentronic International and Camellia Metal Co, you can compare the effects of market volatilities on Sentronic International and Camellia Metal 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 Sentronic International with a short position of Camellia Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sentronic International and Camellia Metal.
Diversification Opportunities for Sentronic International and Camellia Metal
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Sentronic and Camellia is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Sentronic International and Camellia Metal Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Camellia Metal and Sentronic International 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 Sentronic International are associated (or correlated) with Camellia Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Camellia Metal has no effect on the direction of Sentronic International i.e., Sentronic International and Camellia Metal go up and down completely randomly.
Pair Corralation between Sentronic International and Camellia Metal
Assuming the 90 days trading horizon Sentronic International is expected to generate 1.64 times more return on investment than Camellia Metal. However, Sentronic International is 1.64 times more volatile than Camellia Metal Co. It trades about 0.02 of its potential returns per unit of risk. Camellia Metal Co is currently generating about -0.01 per unit of risk. If you would invest 2,340 in Sentronic International on September 4, 2024 and sell it today you would earn a total of 105.00 from holding Sentronic International or generate 4.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sentronic International vs. Camellia Metal Co
Performance |
| Timeline |
| Sentronic International |
| Camellia Metal |
Sentronic International and Camellia Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sentronic International and Camellia Metal
The main advantage of trading using opposite Sentronic International and Camellia Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sentronic International position performs unexpectedly, Camellia Metal 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 Camellia Metal will offset losses from the drop in Camellia Metal's long position.| Sentronic International vs. Dimension Computer Technology | Sentronic International vs. Ruentex Development Co | Sentronic International vs. Symtek Automation Asia | Sentronic International vs. CTCI Corp |
| Camellia Metal vs. Catcher Technology Co | Camellia Metal vs. Evergreen Steel Corp | Camellia Metal vs. China Metal Products | Camellia Metal vs. Chernan Metal Industrial |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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