Correlation Between Sitronix Technology and Elan Microelectronics
Can any of the company-specific risk be diversified away by investing in both Sitronix Technology and Elan Microelectronics 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 Elan Microelectronics 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 Elan Microelectronics Corp, you can compare the effects of market volatilities on Sitronix Technology and Elan Microelectronics 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 Elan Microelectronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sitronix Technology and Elan Microelectronics.
Diversification Opportunities for Sitronix Technology and Elan Microelectronics
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Sitronix and Elan is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Sitronix Technology Corp and Elan Microelectronics Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elan Microelectronics 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 Elan Microelectronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elan Microelectronics has no effect on the direction of Sitronix Technology i.e., Sitronix Technology and Elan Microelectronics go up and down completely randomly.
Pair Corralation between Sitronix Technology and Elan Microelectronics
Assuming the 90 days trading horizon Sitronix Technology is expected to generate 30.68 times less return on investment than Elan Microelectronics. But when comparing it to its historical volatility, Sitronix Technology Corp is 1.08 times less risky than Elan Microelectronics. It trades about 0.0 of its potential returns per unit of risk. Elan Microelectronics Corp is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 9,847 in Elan Microelectronics Corp on November 27, 2024 and sell it today you would earn a total of 6,153 from holding Elan Microelectronics Corp or generate 62.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sitronix Technology Corp vs. Elan Microelectronics Corp
Performance |
| Timeline |
| Sitronix Technology Corp |
| Elan Microelectronics |
Sitronix Technology and Elan Microelectronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sitronix Technology and Elan Microelectronics
The main advantage of trading using opposite Sitronix Technology and Elan Microelectronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sitronix Technology position performs unexpectedly, Elan Microelectronics 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 Elan Microelectronics will offset losses from the drop in Elan Microelectronics' long position.| Sitronix Technology vs. Sunplus Technology Co | Sitronix Technology vs. Silicon Integrated Systems | Sitronix Technology vs. Realtek Semiconductor Corp | Sitronix Technology vs. Elan Microelectronics Corp |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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