Correlation Between Champion Microelectronic and Space Shuttle
Can any of the company-specific risk be diversified away by investing in both Champion Microelectronic and Space Shuttle 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 Champion Microelectronic and Space Shuttle into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Champion Microelectronic Corp and Space Shuttle Hi Tech, you can compare the effects of market volatilities on Champion Microelectronic and Space Shuttle 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 Champion Microelectronic with a short position of Space Shuttle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Champion Microelectronic and Space Shuttle.
Diversification Opportunities for Champion Microelectronic and Space Shuttle
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Champion and Space is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Champion Microelectronic Corp and Space Shuttle Hi Tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Space Shuttle Hi and Champion Microelectronic 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 Champion Microelectronic Corp are associated (or correlated) with Space Shuttle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Space Shuttle Hi has no effect on the direction of Champion Microelectronic i.e., Champion Microelectronic and Space Shuttle go up and down completely randomly.
Pair Corralation between Champion Microelectronic and Space Shuttle
Assuming the 90 days trading horizon Champion Microelectronic Corp is expected to generate 1.95 times more return on investment than Space Shuttle. However, Champion Microelectronic is 1.95 times more volatile than Space Shuttle Hi Tech. It trades about -0.15 of its potential returns per unit of risk. Space Shuttle Hi Tech is currently generating about -0.31 per unit of risk. If you would invest 7,000 in Champion Microelectronic Corp on September 2, 2024 and sell it today you would lose (720.00) from holding Champion Microelectronic Corp or give up 10.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Champion Microelectronic Corp vs. Space Shuttle Hi Tech
Performance |
| Timeline |
| Champion Microelectronic |
| Space Shuttle Hi |
Champion Microelectronic and Space Shuttle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Champion Microelectronic and Space Shuttle
The main advantage of trading using opposite Champion Microelectronic and Space Shuttle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Champion Microelectronic position performs unexpectedly, Space Shuttle 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 Space Shuttle will offset losses from the drop in Space Shuttle's long position.| Champion Microelectronic vs. United Microelectronics | Champion Microelectronic vs. Winbond Electronics Corp |
| Space Shuttle vs. Universal Microelectronics Co | Space Shuttle vs. Greatek Electronics | Space Shuttle vs. Phihong Technology Co | Space Shuttle vs. Zippy Technology 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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