Correlation Between MPI and Sino American
Can any of the company-specific risk be diversified away by investing in both MPI and Sino American 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 MPI and Sino American into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MPI Corporation and Sino American Silicon Products, you can compare the effects of market volatilities on MPI and Sino American 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 MPI with a short position of Sino American. Check out your portfolio center. Please also check ongoing floating volatility patterns of MPI and Sino American.
Diversification Opportunities for MPI and Sino American
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between MPI and Sino is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding MPI Corp. and Sino American Silicon Products in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sino American Silicon and MPI 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 MPI Corporation are associated (or correlated) with Sino American. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sino American Silicon has no effect on the direction of MPI i.e., MPI and Sino American go up and down completely randomly.
Pair Corralation between MPI and Sino American
Assuming the 90 days trading horizon MPI Corporation is expected to generate 2.12 times more return on investment than Sino American. However, MPI is 2.12 times more volatile than Sino American Silicon Products. It trades about 0.0 of its potential returns per unit of risk. Sino American Silicon Products is currently generating about -0.08 per unit of risk. If you would invest 78,900 in MPI Corporation on September 2, 2024 and sell it today you would lose (900.00) from holding MPI Corporation or give up 1.14% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MPI Corp. vs. Sino American Silicon Products
Performance |
| Timeline |
| MPI Corporation |
| Sino American Silicon |
MPI and Sino American Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MPI and Sino American
The main advantage of trading using opposite MPI and Sino American positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MPI position performs unexpectedly, Sino American 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 Sino American will offset losses from the drop in Sino American's long position.| MPI vs. Sino American Silicon Products | MPI vs. Powertech Technology | MPI vs. Formosa Sumco Technology | MPI vs. Radiant Opto Electronics Corp |
| Sino American vs. GlobalWafers Co | Sino American vs. Wafer Works | Sino American vs. Motech Industries Co | Sino American vs. WIN Semiconductors |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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