Correlation Between Sitronix Technology and WT Microelectronics
Can any of the company-specific risk be diversified away by investing in both Sitronix Technology and WT 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 WT 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 WT Microelectronics Co, you can compare the effects of market volatilities on Sitronix Technology and WT 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 WT Microelectronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sitronix Technology and WT Microelectronics.
Diversification Opportunities for Sitronix Technology and WT Microelectronics
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sitronix and 3036A is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Sitronix Technology Corp and WT Microelectronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WT 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 WT Microelectronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WT Microelectronics has no effect on the direction of Sitronix Technology i.e., Sitronix Technology and WT Microelectronics go up and down completely randomly.
Pair Corralation between Sitronix Technology and WT Microelectronics
Assuming the 90 days trading horizon Sitronix Technology Corp is expected to generate 5.77 times more return on investment than WT Microelectronics. However, Sitronix Technology is 5.77 times more volatile than WT Microelectronics Co. It trades about 0.03 of its potential returns per unit of risk. WT Microelectronics Co is currently generating about 0.05 per unit of risk. If you would invest 17,650 in Sitronix Technology Corp on September 3, 2024 and sell it today you would earn a total of 3,050 from holding Sitronix Technology Corp or generate 17.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sitronix Technology Corp vs. WT Microelectronics Co
Performance |
| Timeline |
| Sitronix Technology Corp |
| WT Microelectronics |
Sitronix Technology and WT Microelectronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sitronix Technology and WT Microelectronics
The main advantage of trading using opposite Sitronix Technology and WT Microelectronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sitronix Technology position performs unexpectedly, WT 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 WT Microelectronics will offset losses from the drop in WT Microelectronics' long position.| Sitronix Technology vs. Taiwan Semiconductor Manufacturing | Sitronix Technology vs. Yang Ming Marine | Sitronix Technology vs. ASE Industrial Holding | Sitronix Technology vs. AU Optronics |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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