Correlation Between Sino American and Newmax Technology
Can any of the company-specific risk be diversified away by investing in both Sino American and Newmax Technology 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 Newmax Technology 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 Newmax Technology Co, you can compare the effects of market volatilities on Sino American and Newmax Technology 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 Newmax Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sino American and Newmax Technology.
Diversification Opportunities for Sino American and Newmax Technology
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sino and Newmax is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Sino American Silicon Products and Newmax Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Newmax Technology 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 Newmax Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Newmax Technology has no effect on the direction of Sino American i.e., Sino American and Newmax Technology go up and down completely randomly.
Pair Corralation between Sino American and Newmax Technology
Assuming the 90 days trading horizon Sino American Silicon Products is expected to generate 0.94 times more return on investment than Newmax Technology. However, Sino American Silicon Products is 1.06 times less risky than Newmax Technology. It trades about -0.03 of its potential returns per unit of risk. Newmax Technology Co is currently generating about -0.06 per unit of risk. If you would invest 17,500 in Sino American Silicon Products on September 14, 2024 and sell it today you would lose (2,700) from holding Sino American Silicon Products or give up 15.43% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sino American Silicon Products vs. Newmax Technology Co
Performance |
| Timeline |
| Sino American Silicon |
| Newmax Technology |
Sino American and Newmax Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sino American and Newmax Technology
The main advantage of trading using opposite Sino American and Newmax Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sino American position performs unexpectedly, Newmax Technology 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 Newmax Technology will offset losses from the drop in Newmax Technology's long position.| Sino American vs. Elan Microelectronics Corp | Sino American vs. Greatek Electronics | Sino American vs. Ruentex Development Co | Sino American vs. WiseChip Semiconductor |
| Newmax Technology vs. Genius Electronic Optical | Newmax Technology vs. Asia Optical Co | Newmax Technology vs. LARGAN Precision Co | Newmax Technology vs. Sino American Silicon Products |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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