Correlation Between Motech Industries and Sino American
Can any of the company-specific risk be diversified away by investing in both Motech Industries 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 Motech Industries and Sino American into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Motech Industries Co and Sino American Silicon Products, you can compare the effects of market volatilities on Motech Industries 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 Motech Industries with a short position of Sino American. Check out your portfolio center. Please also check ongoing floating volatility patterns of Motech Industries and Sino American.
Diversification Opportunities for Motech Industries and Sino American
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Motech and Sino is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Motech Industries Co 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 Motech Industries 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 Motech Industries Co 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 Motech Industries i.e., Motech Industries and Sino American go up and down completely randomly.
Pair Corralation between Motech Industries and Sino American
Assuming the 90 days trading horizon Motech Industries Co is expected to under-perform the Sino American. In addition to that, Motech Industries is 1.27 times more volatile than Sino American Silicon Products. It trades about -0.02 of its total potential returns per unit of risk. Sino American Silicon Products is currently generating about -0.02 per unit of volatility. If you would invest 16,018 in Sino American Silicon Products on October 25, 2024 and sell it today you would lose (4,068) from holding Sino American Silicon Products or give up 25.4% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.79% |
| Values | Daily Returns |
Motech Industries Co vs. Sino American Silicon Products
Performance |
| Timeline |
| Motech Industries |
| Sino American Silicon |
Motech Industries and Sino American Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Motech Industries and Sino American
The main advantage of trading using opposite Motech Industries and Sino American positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Motech Industries 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.| Motech Industries vs. United Renewable Energy | Motech Industries vs. TSEC Corp | Motech Industries vs. Gigasolar Materials | Motech Industries vs. Tainergy Tech Co |
| 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 CEOs Directory module to screen CEOs from public companies around the world.
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