Correlation Between New Advanced and Sanyang
Can any of the company-specific risk be diversified away by investing in both New Advanced and Sanyang 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 New Advanced and Sanyang into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between New Advanced Electronics and Sanyang Motor Co, you can compare the effects of market volatilities on New Advanced and Sanyang 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 New Advanced with a short position of Sanyang. Check out your portfolio center. Please also check ongoing floating volatility patterns of New Advanced and Sanyang.
Diversification Opportunities for New Advanced and Sanyang
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between New and Sanyang is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding New Advanced Electronics and Sanyang Motor Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sanyang Motor and New Advanced 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 New Advanced Electronics are associated (or correlated) with Sanyang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sanyang Motor has no effect on the direction of New Advanced i.e., New Advanced and Sanyang go up and down completely randomly.
Pair Corralation between New Advanced and Sanyang
Assuming the 90 days trading horizon New Advanced Electronics is expected to under-perform the Sanyang. In addition to that, New Advanced is 1.53 times more volatile than Sanyang Motor Co. It trades about -0.27 of its total potential returns per unit of risk. Sanyang Motor Co is currently generating about 0.02 per unit of volatility. If you would invest 6,990 in Sanyang Motor Co on August 31, 2024 and sell it today you would earn a total of 20.00 from holding Sanyang Motor Co or generate 0.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
New Advanced Electronics vs. Sanyang Motor Co
Performance |
| Timeline |
| New Advanced Electronics |
| Sanyang Motor |
New Advanced and Sanyang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with New Advanced and Sanyang
The main advantage of trading using opposite New Advanced and Sanyang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if New Advanced position performs unexpectedly, Sanyang 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 Sanyang will offset losses from the drop in Sanyang's long position.| New Advanced vs. Chung Lien Transportation | New Advanced vs. Voltronic Power Technology | New Advanced vs. Min Aik Technology | New Advanced vs. First Copper Technology |
| Sanyang vs. Chaintech Technology Corp | Sanyang vs. AVerMedia Technologies | Sanyang vs. Avision | Sanyang vs. Clevo Co |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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