Correlation Between Sitronix Technology and CviLux Corp
Can any of the company-specific risk be diversified away by investing in both Sitronix Technology and CviLux Corp 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 CviLux Corp 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 CviLux Corp, you can compare the effects of market volatilities on Sitronix Technology and CviLux Corp 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 CviLux Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sitronix Technology and CviLux Corp.
Diversification Opportunities for Sitronix Technology and CviLux Corp
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sitronix and CviLux is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Sitronix Technology Corp and CviLux Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CviLux Corp 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 CviLux Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CviLux Corp has no effect on the direction of Sitronix Technology i.e., Sitronix Technology and CviLux Corp go up and down completely randomly.
Pair Corralation between Sitronix Technology and CviLux Corp
Assuming the 90 days trading horizon Sitronix Technology Corp is expected to under-perform the CviLux Corp. But the stock apears to be less risky and, when comparing its historical volatility, Sitronix Technology Corp is 1.38 times less risky than CviLux Corp. The stock trades about -0.05 of its potential returns per unit of risk. The CviLux Corp is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 4,430 in CviLux Corp on November 3, 2024 and sell it today you would earn a total of 530.00 from holding CviLux Corp or generate 11.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sitronix Technology Corp vs. CviLux Corp
Performance |
| Timeline |
| Sitronix Technology Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| CviLux Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Sitronix Technology and CviLux Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sitronix Technology and CviLux Corp
The main advantage of trading using opposite Sitronix Technology and CviLux Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sitronix Technology position performs unexpectedly, CviLux Corp 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 CviLux Corp will offset losses from the drop in CviLux Corp's long position.The idea behind Sitronix Technology Corp and CviLux Corp 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.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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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