Correlation Between Advanced Analog and Sinopower Semiconductor
Can any of the company-specific risk be diversified away by investing in both Advanced Analog and Sinopower Semiconductor 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 Advanced Analog and Sinopower Semiconductor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Advanced Analog Technology and Sinopower Semiconductor, you can compare the effects of market volatilities on Advanced Analog and Sinopower Semiconductor 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 Advanced Analog with a short position of Sinopower Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advanced Analog and Sinopower Semiconductor.
Diversification Opportunities for Advanced Analog and Sinopower Semiconductor
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Advanced and Sinopower is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Advanced Analog Technology and Sinopower Semiconductor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sinopower Semiconductor and Advanced Analog 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 Advanced Analog Technology are associated (or correlated) with Sinopower Semiconductor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sinopower Semiconductor has no effect on the direction of Advanced Analog i.e., Advanced Analog and Sinopower Semiconductor go up and down completely randomly.
Pair Corralation between Advanced Analog and Sinopower Semiconductor
Assuming the 90 days trading horizon Advanced Analog Technology is expected to generate 1.23 times more return on investment than Sinopower Semiconductor. However, Advanced Analog is 1.23 times more volatile than Sinopower Semiconductor. It trades about 0.01 of its potential returns per unit of risk. Sinopower Semiconductor is currently generating about 0.0 per unit of risk. If you would invest 7,156 in Advanced Analog Technology on September 2, 2024 and sell it today you would lose (316.00) from holding Advanced Analog Technology or give up 4.42% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Advanced Analog Technology vs. Sinopower Semiconductor
Performance |
| Timeline |
| Advanced Analog Tech |
| Sinopower Semiconductor |
Advanced Analog and Sinopower Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Advanced Analog and Sinopower Semiconductor
The main advantage of trading using opposite Advanced Analog and Sinopower Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advanced Analog position performs unexpectedly, Sinopower Semiconductor 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 Sinopower Semiconductor will offset losses from the drop in Sinopower Semiconductor's long position.| Advanced Analog vs. Grand Pacific Petrochemical | Advanced Analog vs. Chernan Metal Industrial | Advanced Analog vs. Chung Hwa Chemical | Advanced Analog vs. Sunspring Metal 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
Other Complementary Tools
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities |