Correlation Between Sitronix Technology and Professional Computer
Can any of the company-specific risk be diversified away by investing in both Sitronix Technology and Professional Computer 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 Professional Computer 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 Professional Computer Technology, you can compare the effects of market volatilities on Sitronix Technology and Professional Computer 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 Professional Computer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sitronix Technology and Professional Computer.
Diversification Opportunities for Sitronix Technology and Professional Computer
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sitronix and Professional is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Sitronix Technology Corp and Professional Computer Technolo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Professional Computer 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 Professional Computer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Professional Computer has no effect on the direction of Sitronix Technology i.e., Sitronix Technology and Professional Computer go up and down completely randomly.
Pair Corralation between Sitronix Technology and Professional Computer
Assuming the 90 days trading horizon Sitronix Technology Corp is expected to generate 0.77 times more return on investment than Professional Computer. However, Sitronix Technology Corp is 1.29 times less risky than Professional Computer. It trades about -0.12 of its potential returns per unit of risk. Professional Computer Technology is currently generating about -0.15 per unit of risk. If you would invest 21,450 in Sitronix Technology Corp on September 3, 2024 and sell it today you would lose (750.00) from holding Sitronix Technology Corp or give up 3.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sitronix Technology Corp vs. Professional Computer Technolo
Performance |
| Timeline |
| Sitronix Technology Corp |
| Professional Computer |
Sitronix Technology and Professional Computer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sitronix Technology and Professional Computer
The main advantage of trading using opposite Sitronix Technology and Professional Computer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sitronix Technology position performs unexpectedly, Professional Computer 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 Professional Computer will offset losses from the drop in Professional Computer's 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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