Correlation Between Silicon Power and First Copper
Can any of the company-specific risk be diversified away by investing in both Silicon Power and First Copper 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 Silicon Power and First Copper into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Silicon Power Computer and First Copper Technology, you can compare the effects of market volatilities on Silicon Power and First Copper 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 Silicon Power with a short position of First Copper. Check out your portfolio center. Please also check ongoing floating volatility patterns of Silicon Power and First Copper.
Diversification Opportunities for Silicon Power and First Copper
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Silicon and First is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Silicon Power Computer and First Copper Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Copper Technology and Silicon Power 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 Silicon Power Computer are associated (or correlated) with First Copper. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Copper Technology has no effect on the direction of Silicon Power i.e., Silicon Power and First Copper go up and down completely randomly.
Pair Corralation between Silicon Power and First Copper
Assuming the 90 days trading horizon Silicon Power Computer is expected to generate 1.05 times more return on investment than First Copper. However, Silicon Power is 1.05 times more volatile than First Copper Technology. It trades about -0.09 of its potential returns per unit of risk. First Copper Technology is currently generating about -0.1 per unit of risk. If you would invest 4,565 in Silicon Power Computer on October 25, 2024 and sell it today you would lose (1,420) from holding Silicon Power Computer or give up 31.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Silicon Power Computer vs. First Copper Technology
Performance |
| Timeline |
| Silicon Power Computer |
| First Copper Technology |
Silicon Power and First Copper Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Silicon Power and First Copper
The main advantage of trading using opposite Silicon Power and First Copper positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Silicon Power position performs unexpectedly, First Copper 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 First Copper will offset losses from the drop in First Copper's long position.| Silicon Power vs. X Legend Entertainment Co | Silicon Power vs. Hwa Fong Rubber | Silicon Power vs. Formosan Rubber Group | Silicon Power vs. C Media Electronics |
| First Copper vs. Chung Hung Steel | First Copper vs. Ta Chen Stainless | First Copper vs. Tung Ho Steel | First Copper vs. Yieh Phui Enterprise |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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