Correlation Between Trade Van and Sentronic International
Can any of the company-specific risk be diversified away by investing in both Trade Van and Sentronic International 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 Trade Van and Sentronic International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Trade Van Information Services and Sentronic International, you can compare the effects of market volatilities on Trade Van and Sentronic International 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 Trade Van with a short position of Sentronic International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Trade Van and Sentronic International.
Diversification Opportunities for Trade Van and Sentronic International
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Trade and Sentronic is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Trade Van Information Services and Sentronic International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sentronic International and Trade Van 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 Trade Van Information Services are associated (or correlated) with Sentronic International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sentronic International has no effect on the direction of Trade Van i.e., Trade Van and Sentronic International go up and down completely randomly.
Pair Corralation between Trade Van and Sentronic International
Assuming the 90 days trading horizon Trade Van Information Services is expected to generate 0.36 times more return on investment than Sentronic International. However, Trade Van Information Services is 2.75 times less risky than Sentronic International. It trades about 0.1 of its potential returns per unit of risk. Sentronic International is currently generating about -0.02 per unit of risk. If you would invest 5,860 in Trade Van Information Services on September 14, 2024 and sell it today you would earn a total of 2,430 from holding Trade Van Information Services or generate 41.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
Trade Van Information Services vs. Sentronic International
Performance |
| Timeline |
| Trade Van Information |
| Sentronic International |
Trade Van and Sentronic International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Trade Van and Sentronic International
The main advantage of trading using opposite Trade Van and Sentronic International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Trade Van position performs unexpectedly, Sentronic International 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 Sentronic International will offset losses from the drop in Sentronic International's long position.| Trade Van vs. AU Optronics | Trade Van vs. Innolux Corp | Trade Van vs. Ruentex Development Co | Trade Van vs. WiseChip Semiconductor |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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