Correlation Between Sitronix Technology and GlobalWafers
Can any of the company-specific risk be diversified away by investing in both Sitronix Technology and GlobalWafers 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 GlobalWafers 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 GlobalWafers Co, you can compare the effects of market volatilities on Sitronix Technology and GlobalWafers 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 GlobalWafers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sitronix Technology and GlobalWafers.
Diversification Opportunities for Sitronix Technology and GlobalWafers
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Sitronix and GlobalWafers is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Sitronix Technology Corp and GlobalWafers Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GlobalWafers 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 GlobalWafers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GlobalWafers has no effect on the direction of Sitronix Technology i.e., Sitronix Technology and GlobalWafers go up and down completely randomly.
Pair Corralation between Sitronix Technology and GlobalWafers
Assuming the 90 days trading horizon Sitronix Technology Corp is expected to generate 0.64 times more return on investment than GlobalWafers. However, Sitronix Technology Corp is 1.55 times less risky than GlobalWafers. It trades about 0.12 of its potential returns per unit of risk. GlobalWafers Co is currently generating about -0.05 per unit of risk. If you would invest 20,500 in Sitronix Technology Corp on November 27, 2024 and sell it today you would earn a total of 1,950 from holding Sitronix Technology Corp or generate 9.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sitronix Technology Corp vs. GlobalWafers Co
Performance |
| Timeline |
| Sitronix Technology Corp |
| GlobalWafers |
Sitronix Technology and GlobalWafers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sitronix Technology and GlobalWafers
The main advantage of trading using opposite Sitronix Technology and GlobalWafers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sitronix Technology position performs unexpectedly, GlobalWafers 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 GlobalWafers will offset losses from the drop in GlobalWafers' 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 |
| GlobalWafers vs. WIN Semiconductors | GlobalWafers vs. Sino American Silicon Products | GlobalWafers vs. Novatek Microelectronics Corp | GlobalWafers vs. Yageo 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 Global Correlations module to find global opportunities by holding instruments from different markets.
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