Correlation Between Powertech Technology and Sino American
Can any of the company-specific risk be diversified away by investing in both Powertech Technology 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 Powertech Technology and Sino American into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Powertech Technology and Sino American Silicon Products, you can compare the effects of market volatilities on Powertech Technology 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 Powertech Technology with a short position of Sino American. Check out your portfolio center. Please also check ongoing floating volatility patterns of Powertech Technology and Sino American.
Diversification Opportunities for Powertech Technology and Sino American
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Powertech and Sino is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Powertech Technology 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 Powertech Technology 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 Powertech Technology 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 Powertech Technology i.e., Powertech Technology and Sino American go up and down completely randomly.
Pair Corralation between Powertech Technology and Sino American
Assuming the 90 days trading horizon Powertech Technology is expected to generate 0.79 times more return on investment than Sino American. However, Powertech Technology is 1.27 times less risky than Sino American. It trades about -0.16 of its potential returns per unit of risk. Sino American Silicon Products is currently generating about -0.32 per unit of risk. If you would invest 12,500 in Powertech Technology on October 25, 2024 and sell it today you would lose (800.00) from holding Powertech Technology or give up 6.4% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Powertech Technology vs. Sino American Silicon Products
Performance |
| Timeline |
| Powertech Technology |
| Sino American Silicon |
Powertech Technology and Sino American Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Powertech Technology and Sino American
The main advantage of trading using opposite Powertech Technology and Sino American positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Powertech Technology 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.| Powertech Technology vs. Novatek Microelectronics Corp | Powertech Technology vs. King Yuan Electronics | Powertech Technology vs. Realtek Semiconductor Corp | Powertech Technology vs. Nanya Technology 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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