Correlation Between Cameo Communications and Silicon Power
Can any of the company-specific risk be diversified away by investing in both Cameo Communications and Silicon Power 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 Cameo Communications and Silicon Power into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cameo Communications and Silicon Power Computer, you can compare the effects of market volatilities on Cameo Communications and Silicon Power 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 Cameo Communications with a short position of Silicon Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cameo Communications and Silicon Power.
Diversification Opportunities for Cameo Communications and Silicon Power
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Cameo and Silicon is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Cameo Communications and Silicon Power Computer in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Silicon Power Computer and Cameo Communications 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 Cameo Communications are associated (or correlated) with Silicon Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Silicon Power Computer has no effect on the direction of Cameo Communications i.e., Cameo Communications and Silicon Power go up and down completely randomly.
Pair Corralation between Cameo Communications and Silicon Power
Assuming the 90 days trading horizon Cameo Communications is expected to generate 1.35 times more return on investment than Silicon Power. However, Cameo Communications is 1.35 times more volatile than Silicon Power Computer. It trades about 0.05 of its potential returns per unit of risk. Silicon Power Computer is currently generating about -0.13 per unit of risk. If you would invest 1,010 in Cameo Communications on August 30, 2024 and sell it today you would earn a total of 160.00 from holding Cameo Communications or generate 15.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cameo Communications vs. Silicon Power Computer
Performance |
| Timeline |
| Cameo Communications |
| Silicon Power Computer |
Cameo Communications and Silicon Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cameo Communications and Silicon Power
The main advantage of trading using opposite Cameo Communications and Silicon Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cameo Communications position performs unexpectedly, Silicon Power 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 Silicon Power will offset losses from the drop in Silicon Power's long position.| Cameo Communications vs. Gemtek Technology Co | Cameo Communications vs. CyberTAN Technology | Cameo Communications vs. Alpha Networks | Cameo Communications vs. D Link Corp |
| Silicon Power vs. Qisda Corp | Silicon Power vs. Quanta Computer | Silicon Power vs. Coretronic | Silicon Power vs. Wistron 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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