Correlation Between Niching Industrial and Microelectronics
Can any of the company-specific risk be diversified away by investing in both Niching Industrial and Microelectronics 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 Niching Industrial and Microelectronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Niching Industrial and Microelectronics Technology, you can compare the effects of market volatilities on Niching Industrial and Microelectronics 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 Niching Industrial with a short position of Microelectronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Niching Industrial and Microelectronics.
Diversification Opportunities for Niching Industrial and Microelectronics
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Niching and Microelectronics is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Niching Industrial and Microelectronics Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Microelectronics Tec and Niching Industrial 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 Niching Industrial are associated (or correlated) with Microelectronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Microelectronics Tec has no effect on the direction of Niching Industrial i.e., Niching Industrial and Microelectronics go up and down completely randomly.
Pair Corralation between Niching Industrial and Microelectronics
Assuming the 90 days trading horizon Niching Industrial is expected to generate 1.57 times less return on investment than Microelectronics. But when comparing it to its historical volatility, Niching Industrial is 2.04 times less risky than Microelectronics. It trades about 0.09 of its potential returns per unit of risk. Microelectronics Technology is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 2,950 in Microelectronics Technology on September 4, 2024 and sell it today you would earn a total of 135.00 from holding Microelectronics Technology or generate 4.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Niching Industrial vs. Microelectronics Technology
Performance |
| Timeline |
| Niching Industrial |
| Microelectronics Tec |
Niching Industrial and Microelectronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Niching Industrial and Microelectronics
The main advantage of trading using opposite Niching Industrial and Microelectronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Niching Industrial position performs unexpectedly, Microelectronics 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 Microelectronics will offset losses from the drop in Microelectronics' long position.| Niching Industrial vs. Microelectronics Technology | Niching Industrial vs. Bright Led Electronics | Niching Industrial vs. Shanghai Commercial Savings | Niching Industrial vs. LandMark Optoelectronics |
| Microelectronics vs. D Link Corp | Microelectronics vs. Accton Technology Corp | Microelectronics vs. Macronix International Co | Microelectronics vs. Ritek 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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