Correlation Between Sino American and Solar Applied
Can any of the company-specific risk be diversified away by investing in both Sino American and Solar Applied 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 Sino American and Solar Applied into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sino American Silicon Products and Solar Applied Materials, you can compare the effects of market volatilities on Sino American and Solar Applied 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 Sino American with a short position of Solar Applied. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sino American and Solar Applied.
Diversification Opportunities for Sino American and Solar Applied
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Sino and Solar is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Sino American Silicon Products and Solar Applied Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Solar Applied Materials and Sino American 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 Sino American Silicon Products are associated (or correlated) with Solar Applied. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Solar Applied Materials has no effect on the direction of Sino American i.e., Sino American and Solar Applied go up and down completely randomly.
Pair Corralation between Sino American and Solar Applied
Assuming the 90 days trading horizon Sino American Silicon Products is expected to generate 0.74 times more return on investment than Solar Applied. However, Sino American Silicon Products is 1.35 times less risky than Solar Applied. It trades about -0.05 of its potential returns per unit of risk. Solar Applied Materials is currently generating about -0.05 per unit of risk. If you would invest 16,200 in Sino American Silicon Products on August 28, 2024 and sell it today you would lose (350.00) from holding Sino American Silicon Products or give up 2.16% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sino American Silicon Products vs. Solar Applied Materials
Performance |
| Timeline |
| Sino American Silicon |
| Solar Applied Materials |
Sino American and Solar Applied Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sino American and Solar Applied
The main advantage of trading using opposite Sino American and Solar Applied positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sino American position performs unexpectedly, Solar Applied 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 Solar Applied will offset losses from the drop in Solar Applied's long position.| Sino American vs. GlobalWafers Co | Sino American vs. Wafer Works | Sino American vs. Motech Industries Co | Sino American vs. WIN Semiconductors |
| Solar Applied vs. Wafer Works | Solar Applied vs. Sino American Silicon Products | Solar Applied vs. StShine Optical Co | Solar Applied vs. Phison Electronics |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance |