Correlation Between Sino American and Chipbond Technology
Can any of the company-specific risk be diversified away by investing in both Sino American and Chipbond 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 Chipbond 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 Chipbond Technology, you can compare the effects of market volatilities on Sino American and Chipbond 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 Chipbond Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sino American and Chipbond Technology.
Diversification Opportunities for Sino American and Chipbond Technology
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sino and Chipbond is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Sino American Silicon Products and Chipbond Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chipbond 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 Chipbond Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chipbond Technology has no effect on the direction of Sino American i.e., Sino American and Chipbond Technology go up and down completely randomly.
Pair Corralation between Sino American and Chipbond Technology
Assuming the 90 days trading horizon Sino American Silicon Products is expected to generate 1.34 times more return on investment than Chipbond Technology. However, Sino American is 1.34 times more volatile than Chipbond Technology. It trades about 0.02 of its potential returns per unit of risk. Chipbond Technology is currently generating about 0.02 per unit of risk. If you would invest 14,671 in Sino American Silicon Products on September 4, 2024 and sell it today you would earn a total of 1,029 from holding Sino American Silicon Products or generate 7.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sino American Silicon Products vs. Chipbond Technology
Performance |
| Timeline |
| Sino American Silicon |
| Chipbond Technology |
Sino American and Chipbond Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sino American and Chipbond Technology
The main advantage of trading using opposite Sino American and Chipbond Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sino American position performs unexpectedly, Chipbond 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 Chipbond Technology will offset losses from the drop in Chipbond Technology's long position.| Sino American vs. WIN Semiconductors | Sino American vs. Delta Electronics | Sino American vs. WiseChip Semiconductor | Sino American vs. Novatek Microelectronics Corp |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
Other Complementary Tools
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Stocks Directory Find actively traded stocks across global markets |