Correlation Between Flexium Interconnect and Sunspring Metal
Can any of the company-specific risk be diversified away by investing in both Flexium Interconnect and Sunspring Metal 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 Flexium Interconnect and Sunspring Metal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Flexium Interconnect and Sunspring Metal Corp, you can compare the effects of market volatilities on Flexium Interconnect and Sunspring Metal 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 Flexium Interconnect with a short position of Sunspring Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Flexium Interconnect and Sunspring Metal.
Diversification Opportunities for Flexium Interconnect and Sunspring Metal
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Flexium and Sunspring is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Flexium Interconnect and Sunspring Metal Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sunspring Metal Corp and Flexium Interconnect 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 Flexium Interconnect are associated (or correlated) with Sunspring Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sunspring Metal Corp has no effect on the direction of Flexium Interconnect i.e., Flexium Interconnect and Sunspring Metal go up and down completely randomly.
Pair Corralation between Flexium Interconnect and Sunspring Metal
Assuming the 90 days trading horizon Flexium Interconnect is expected to under-perform the Sunspring Metal. But the stock apears to be less risky and, when comparing its historical volatility, Flexium Interconnect is 1.87 times less risky than Sunspring Metal. The stock trades about -0.11 of its potential returns per unit of risk. The Sunspring Metal Corp is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 2,810 in Sunspring Metal Corp on October 13, 2024 and sell it today you would earn a total of 280.00 from holding Sunspring Metal Corp or generate 9.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Flexium Interconnect vs. Sunspring Metal Corp
Performance |
| Timeline |
| Flexium Interconnect |
| Sunspring Metal Corp |
Flexium Interconnect and Sunspring Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Flexium Interconnect and Sunspring Metal
The main advantage of trading using opposite Flexium Interconnect and Sunspring Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Flexium Interconnect position performs unexpectedly, Sunspring Metal 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 Sunspring Metal will offset losses from the drop in Sunspring Metal's long position.| Flexium Interconnect vs. Holy Stone Enterprise | Flexium Interconnect vs. Walsin Technology Corp | Flexium Interconnect vs. Yageo Corp | Flexium Interconnect vs. HannStar Board Corp |
| Sunspring Metal vs. Hota Industrial Mfg | Sunspring Metal vs. Sinbon Electronics Co | Sunspring Metal vs. Tong Hsing Electronic | Sunspring Metal vs. Flexium Interconnect |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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