Correlation Between Sitronix Technology and Ennostar
Can any of the company-specific risk be diversified away by investing in both Sitronix Technology and Ennostar 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 Ennostar 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 Ennostar, you can compare the effects of market volatilities on Sitronix Technology and Ennostar 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 Ennostar. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sitronix Technology and Ennostar.
Diversification Opportunities for Sitronix Technology and Ennostar
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Sitronix and Ennostar is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Sitronix Technology Corp and Ennostar in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ennostar 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 Ennostar. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ennostar has no effect on the direction of Sitronix Technology i.e., Sitronix Technology and Ennostar go up and down completely randomly.
Pair Corralation between Sitronix Technology and Ennostar
Assuming the 90 days trading horizon Sitronix Technology Corp is expected to under-perform the Ennostar. In addition to that, Sitronix Technology is 1.0 times more volatile than Ennostar. It trades about -0.23 of its total potential returns per unit of risk. Ennostar is currently generating about -0.17 per unit of volatility. If you would invest 4,675 in Ennostar on September 1, 2024 and sell it today you would lose (245.00) from holding Ennostar or give up 5.24% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Sitronix Technology Corp vs. Ennostar
Performance |
| Timeline |
| Sitronix Technology Corp |
| Ennostar |
Sitronix Technology and Ennostar Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sitronix Technology and Ennostar
The main advantage of trading using opposite Sitronix Technology and Ennostar positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sitronix Technology position performs unexpectedly, Ennostar 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 Ennostar will offset losses from the drop in Ennostar's long position.The idea behind Sitronix Technology Corp and Ennostar 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.| Ennostar vs. Innolux Corp | Ennostar vs. United Renewable Energy | Ennostar vs. Acbel Polytech | Ennostar vs. Gigastorage 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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