Correlation Between Silitech Technology and Ichia Technologies
Can any of the company-specific risk be diversified away by investing in both Silitech Technology and Ichia Technologies 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 Silitech Technology and Ichia Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Silitech Technology Corp and Ichia Technologies, you can compare the effects of market volatilities on Silitech Technology and Ichia Technologies 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 Silitech Technology with a short position of Ichia Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Silitech Technology and Ichia Technologies.
Diversification Opportunities for Silitech Technology and Ichia Technologies
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Silitech and Ichia is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Silitech Technology Corp and Ichia Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ichia Technologies and Silitech Technology 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 Silitech Technology Corp are associated (or correlated) with Ichia Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ichia Technologies has no effect on the direction of Silitech Technology i.e., Silitech Technology and Ichia Technologies go up and down completely randomly.
Pair Corralation between Silitech Technology and Ichia Technologies
Assuming the 90 days trading horizon Silitech Technology Corp is expected to generate 0.58 times more return on investment than Ichia Technologies. However, Silitech Technology Corp is 1.73 times less risky than Ichia Technologies. It trades about -0.18 of its potential returns per unit of risk. Ichia Technologies is currently generating about -0.15 per unit of risk. If you would invest 3,450 in Silitech Technology Corp on October 24, 2024 and sell it today you would lose (125.00) from holding Silitech Technology Corp or give up 3.62% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Silitech Technology Corp vs. Ichia Technologies
Performance |
| Timeline |
| Silitech Technology Corp |
| Ichia Technologies |
Silitech Technology and Ichia Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Silitech Technology and Ichia Technologies
The main advantage of trading using opposite Silitech Technology and Ichia Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Silitech Technology position performs unexpectedly, Ichia Technologies 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 Ichia Technologies will offset losses from the drop in Ichia Technologies' long position.| Silitech Technology vs. Ichia Technologies | Silitech Technology vs. Cheng Uei Precision | Silitech Technology vs. Gemtek Technology Co | Silitech Technology vs. Sunplus Technology Co |
| Ichia Technologies vs. Cheng Uei Precision | Ichia Technologies vs. Sunplus Technology Co | Ichia Technologies vs. Merry Electronics Co | Ichia Technologies vs. D Link 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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