Correlation Between Silitech Technology and Powertech Industrial
Can any of the company-specific risk be diversified away by investing in both Silitech Technology and Powertech Industrial 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 Powertech Industrial 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 Powertech Industrial Co, you can compare the effects of market volatilities on Silitech Technology and Powertech Industrial 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 Powertech Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Silitech Technology and Powertech Industrial.
Diversification Opportunities for Silitech Technology and Powertech Industrial
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Silitech and Powertech is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Silitech Technology Corp and Powertech Industrial Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Powertech Industrial 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 Powertech Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Powertech Industrial has no effect on the direction of Silitech Technology i.e., Silitech Technology and Powertech Industrial go up and down completely randomly.
Pair Corralation between Silitech Technology and Powertech Industrial
Assuming the 90 days trading horizon Silitech Technology Corp is expected to generate 0.3 times more return on investment than Powertech Industrial. However, Silitech Technology Corp is 3.38 times less risky than Powertech Industrial. It trades about -0.22 of its potential returns per unit of risk. Powertech Industrial Co is currently generating about -0.16 per unit of risk. If you would invest 3,580 in Silitech Technology Corp on October 12, 2024 and sell it today you would lose (200.00) from holding Silitech Technology Corp or give up 5.59% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Silitech Technology Corp vs. Powertech Industrial Co
Performance |
| Timeline |
| Silitech Technology Corp |
| Powertech Industrial |
Silitech Technology and Powertech Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Silitech Technology and Powertech Industrial
The main advantage of trading using opposite Silitech Technology and Powertech Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Silitech Technology position performs unexpectedly, Powertech Industrial 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 Powertech Industrial will offset losses from the drop in Powertech Industrial's 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 |
| Powertech Industrial vs. Leader Electronics | Powertech Industrial vs. Darwin Precisions Corp | Powertech Industrial vs. Silitech Technology Corp | Powertech Industrial vs. Altek 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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