Correlation Between Sitronix Technology and Taiflex Scientific
Can any of the company-specific risk be diversified away by investing in both Sitronix Technology and Taiflex Scientific 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 Taiflex Scientific 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 Taiflex Scientific Co, you can compare the effects of market volatilities on Sitronix Technology and Taiflex Scientific 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 Taiflex Scientific. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sitronix Technology and Taiflex Scientific.
Diversification Opportunities for Sitronix Technology and Taiflex Scientific
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Sitronix and Taiflex is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Sitronix Technology Corp and Taiflex Scientific Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Taiflex Scientific 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 Taiflex Scientific. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Taiflex Scientific has no effect on the direction of Sitronix Technology i.e., Sitronix Technology and Taiflex Scientific go up and down completely randomly.
Pair Corralation between Sitronix Technology and Taiflex Scientific
Assuming the 90 days trading horizon Sitronix Technology Corp is expected to under-perform the Taiflex Scientific. But the stock apears to be less risky and, when comparing its historical volatility, Sitronix Technology Corp is 1.5 times less risky than Taiflex Scientific. The stock trades about -0.1 of its potential returns per unit of risk. The Taiflex Scientific Co is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 5,180 in Taiflex Scientific Co on September 3, 2024 and sell it today you would lose (300.00) from holding Taiflex Scientific Co or give up 5.79% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sitronix Technology Corp vs. Taiflex Scientific Co
Performance |
| Timeline |
| Sitronix Technology Corp |
| Taiflex Scientific |
Sitronix Technology and Taiflex Scientific Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sitronix Technology and Taiflex Scientific
The main advantage of trading using opposite Sitronix Technology and Taiflex Scientific positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sitronix Technology position performs unexpectedly, Taiflex Scientific 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 Taiflex Scientific will offset losses from the drop in Taiflex Scientific'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 |
| Taiflex Scientific vs. Flexium Interconnect | Taiflex Scientific vs. Career Technology MFG | Taiflex Scientific vs. Powertech Technology | Taiflex Scientific vs. Elite Material Co |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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