Correlation Between Sitronix Technology and CoAsia Microelectronics
Can any of the company-specific risk be diversified away by investing in both Sitronix Technology and CoAsia 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 CoAsia 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 CoAsia Microelectronics, you can compare the effects of market volatilities on Sitronix Technology and CoAsia 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 CoAsia Microelectronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sitronix Technology and CoAsia Microelectronics.
Diversification Opportunities for Sitronix Technology and CoAsia Microelectronics
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sitronix and CoAsia is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Sitronix Technology Corp and CoAsia Microelectronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CoAsia 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 CoAsia Microelectronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CoAsia Microelectronics has no effect on the direction of Sitronix Technology i.e., Sitronix Technology and CoAsia Microelectronics go up and down completely randomly.
Pair Corralation between Sitronix Technology and CoAsia Microelectronics
Assuming the 90 days trading horizon Sitronix Technology Corp is expected to generate 0.46 times more return on investment than CoAsia Microelectronics. However, Sitronix Technology Corp is 2.18 times less risky than CoAsia Microelectronics. It trades about -0.07 of its potential returns per unit of risk. CoAsia Microelectronics is currently generating about -0.08 per unit of risk. If you would invest 21,700 in Sitronix Technology Corp on September 12, 2024 and sell it today you would lose (1,350) from holding Sitronix Technology Corp or give up 6.22% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 98.41% |
| Values | Daily Returns |
Sitronix Technology Corp vs. CoAsia Microelectronics
Performance |
| Timeline |
| Sitronix Technology Corp |
| CoAsia Microelectronics |
Sitronix Technology and CoAsia Microelectronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sitronix Technology and CoAsia Microelectronics
The main advantage of trading using opposite Sitronix Technology and CoAsia Microelectronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sitronix Technology position performs unexpectedly, CoAsia 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 CoAsia Microelectronics will offset losses from the drop in CoAsia Microelectronics' long position.| Sitronix Technology vs. AU Optronics | Sitronix Technology vs. Innolux Corp | Sitronix Technology vs. Ruentex Development Co | Sitronix Technology vs. WiseChip Semiconductor |
| CoAsia Microelectronics vs. Promise Technology | CoAsia Microelectronics vs. Intai Technology | CoAsia Microelectronics vs. Double Bond Chemical | CoAsia Microelectronics vs. Grand Pacific Petrochemical |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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