Correlation Between Parade Technologies and Sitronix Technology
Can any of the company-specific risk be diversified away by investing in both Parade Technologies and Sitronix Technology 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 Parade Technologies and Sitronix Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Parade Technologies and Sitronix Technology Corp, you can compare the effects of market volatilities on Parade Technologies and Sitronix Technology 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 Parade Technologies with a short position of Sitronix Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Parade Technologies and Sitronix Technology.
Diversification Opportunities for Parade Technologies and Sitronix Technology
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Parade and Sitronix is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Parade Technologies and Sitronix Technology Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sitronix Technology Corp and Parade Technologies 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 Parade Technologies are associated (or correlated) with Sitronix Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sitronix Technology Corp has no effect on the direction of Parade Technologies i.e., Parade Technologies and Sitronix Technology go up and down completely randomly.
Pair Corralation between Parade Technologies and Sitronix Technology
Assuming the 90 days trading horizon Parade Technologies is expected to generate 1.59 times more return on investment than Sitronix Technology. However, Parade Technologies is 1.59 times more volatile than Sitronix Technology Corp. It trades about 0.21 of its potential returns per unit of risk. Sitronix Technology Corp is currently generating about -0.24 per unit of risk. If you would invest 68,000 in Parade Technologies on September 13, 2024 and sell it today you would earn a total of 6,300 from holding Parade Technologies or generate 9.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Parade Technologies vs. Sitronix Technology Corp
Performance |
| Timeline |
| Parade Technologies |
| Sitronix Technology Corp |
Parade Technologies and Sitronix Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Parade Technologies and Sitronix Technology
The main advantage of trading using opposite Parade Technologies and Sitronix Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Parade Technologies position performs unexpectedly, Sitronix Technology 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 Sitronix Technology will offset losses from the drop in Sitronix Technology's long position.| Parade Technologies vs. WIN Semiconductors | Parade Technologies vs. GlobalWafers Co | Parade Technologies vs. Novatek Microelectronics Corp | Parade Technologies vs. Ruentex Development Co |
| Sitronix Technology vs. AU Optronics | Sitronix Technology vs. Innolux Corp | Sitronix Technology vs. Ruentex Development Co | Sitronix Technology vs. WiseChip Semiconductor |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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