Correlation Between Sitronix Technology and King Yuan
Can any of the company-specific risk be diversified away by investing in both Sitronix Technology and King Yuan 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 Sitronix Technology and King Yuan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sitronix Technology Corp and King Yuan Electronics, you can compare the effects of market volatilities on Sitronix Technology and King Yuan 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 Sitronix Technology with a short position of King Yuan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sitronix Technology and King Yuan.
Diversification Opportunities for Sitronix Technology and King Yuan
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Sitronix and King is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Sitronix Technology Corp and King Yuan Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on King Yuan Electronics and Sitronix 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 Sitronix Technology Corp are associated (or correlated) with King Yuan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of King Yuan Electronics has no effect on the direction of Sitronix Technology i.e., Sitronix Technology and King Yuan go up and down completely randomly.
Pair Corralation between Sitronix Technology and King Yuan
Assuming the 90 days trading horizon Sitronix Technology Corp is expected to under-perform the King Yuan. But the stock apears to be less risky and, when comparing its historical volatility, Sitronix Technology Corp is 1.82 times less risky than King Yuan. The stock trades about -0.11 of its potential returns per unit of risk. The King Yuan Electronics is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 12,100 in King Yuan Electronics on September 2, 2024 and sell it today you would earn a total of 550.00 from holding King Yuan Electronics or generate 4.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sitronix Technology Corp vs. King Yuan Electronics
Performance |
| Timeline |
| Sitronix Technology Corp |
| King Yuan Electronics |
Sitronix Technology and King Yuan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sitronix Technology and King Yuan
The main advantage of trading using opposite Sitronix Technology and King Yuan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sitronix Technology position performs unexpectedly, King Yuan 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 King Yuan will offset losses from the drop in King Yuan's long position.The idea behind Sitronix Technology Corp and King Yuan Electronics pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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