Correlation Between APEX International and Sentronic International
Can any of the company-specific risk be diversified away by investing in both APEX International and Sentronic International 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 APEX International and Sentronic International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between APEX International Financial and Sentronic International, you can compare the effects of market volatilities on APEX International and Sentronic International 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 APEX International with a short position of Sentronic International. Check out your portfolio center. Please also check ongoing floating volatility patterns of APEX International and Sentronic International.
Diversification Opportunities for APEX International and Sentronic International
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between APEX and Sentronic is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding APEX International Financial and Sentronic International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sentronic International and APEX International 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 APEX International Financial are associated (or correlated) with Sentronic International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sentronic International has no effect on the direction of APEX International i.e., APEX International and Sentronic International go up and down completely randomly.
Pair Corralation between APEX International and Sentronic International
Assuming the 90 days trading horizon APEX International Financial is expected to generate 0.72 times more return on investment than Sentronic International. However, APEX International Financial is 1.38 times less risky than Sentronic International. It trades about -0.13 of its potential returns per unit of risk. Sentronic International is currently generating about -0.1 per unit of risk. If you would invest 3,360 in APEX International Financial on September 13, 2024 and sell it today you would lose (355.00) from holding APEX International Financial or give up 10.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
APEX International Financial vs. Sentronic International
Performance |
| Timeline |
| APEX International |
| Sentronic International |
APEX International and Sentronic International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with APEX International and Sentronic International
The main advantage of trading using opposite APEX International and Sentronic International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if APEX International position performs unexpectedly, Sentronic International 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 Sentronic International will offset losses from the drop in Sentronic International's long position.| APEX International vs. Mitake Information | APEX International vs. K Way Information | APEX International vs. YuantaP shares Taiwan Electronics | APEX International vs. YuantaP shares Taiwan Top |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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