Correlation Between Silicon Power and Axiomtek
Can any of the company-specific risk be diversified away by investing in both Silicon Power and Axiomtek 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 Axiomtek 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 Axiomtek Co, you can compare the effects of market volatilities on Silicon Power and Axiomtek 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 Axiomtek. Check out your portfolio center. Please also check ongoing floating volatility patterns of Silicon Power and Axiomtek.
Diversification Opportunities for Silicon Power and Axiomtek
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Silicon and Axiomtek is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Silicon Power Computer and Axiomtek Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Axiomtek 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 Axiomtek. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Axiomtek has no effect on the direction of Silicon Power i.e., Silicon Power and Axiomtek go up and down completely randomly.
Pair Corralation between Silicon Power and Axiomtek
Assuming the 90 days trading horizon Silicon Power is expected to generate 3.15 times less return on investment than Axiomtek. In addition to that, Silicon Power is 1.26 times more volatile than Axiomtek Co. It trades about 0.01 of its total potential returns per unit of risk. Axiomtek Co is currently generating about 0.05 per unit of volatility. If you would invest 8,472 in Axiomtek Co on September 2, 2024 and sell it today you would earn a total of 2,078 from holding Axiomtek Co or generate 24.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Silicon Power Computer vs. Axiomtek Co
Performance |
| Timeline |
| Silicon Power Computer |
| Axiomtek |
Silicon Power and Axiomtek Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Silicon Power and Axiomtek
The main advantage of trading using opposite Silicon Power and Axiomtek positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Silicon Power position performs unexpectedly, Axiomtek 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 Axiomtek will offset losses from the drop in Axiomtek's long position.| Silicon Power vs. Chicony Power Technology | Silicon Power vs. WinMate Communication INC | Silicon Power vs. Univacco Technology | Silicon Power vs. Genovate Biotechnology Co |
| Axiomtek vs. Silicon Power Computer | Axiomtek vs. Double Bond Chemical | Axiomtek vs. Chi Sheng Chemical | Axiomtek vs. Taita Chemical 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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