Correlation Between Sino American and Yageo Corp
Can any of the company-specific risk be diversified away by investing in both Sino American and Yageo Corp 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 Yageo Corp 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 Yageo Corp, you can compare the effects of market volatilities on Sino American and Yageo Corp 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 Yageo Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sino American and Yageo Corp.
Diversification Opportunities for Sino American and Yageo Corp
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sino and Yageo is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Sino American Silicon Products and Yageo Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yageo Corp 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 Yageo Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yageo Corp has no effect on the direction of Sino American i.e., Sino American and Yageo Corp go up and down completely randomly.
Pair Corralation between Sino American and Yageo Corp
Assuming the 90 days trading horizon Sino American Silicon Products is expected to generate 0.81 times more return on investment than Yageo Corp. However, Sino American Silicon Products is 1.24 times less risky than Yageo Corp. It trades about 0.5 of its potential returns per unit of risk. Yageo Corp is currently generating about 0.35 per unit of risk. If you would invest 11,250 in Sino American Silicon Products on November 28, 2024 and sell it today you would earn a total of 1,550 from holding Sino American Silicon Products or generate 13.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sino American Silicon Products vs. Yageo Corp
Performance |
| Timeline |
| Sino American Silicon |
| Yageo Corp |
Sino American and Yageo Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sino American and Yageo Corp
The main advantage of trading using opposite Sino American and Yageo Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sino American position performs unexpectedly, Yageo Corp 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 Yageo Corp will offset losses from the drop in Yageo Corp's long position.| Sino American vs. GlobalWafers Co | Sino American vs. Wafer Works | Sino American vs. Motech Industries Co | Sino American vs. WIN Semiconductors |
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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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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