Correlation Between Taiflex Scientific and Sitronix Technology
Can any of the company-specific risk be diversified away by investing in both Taiflex Scientific and Sitronix Technology 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 Taiflex Scientific and Sitronix Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Taiflex Scientific Co and Sitronix Technology Corp, you can compare the effects of market volatilities on Taiflex Scientific and Sitronix Technology 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 Taiflex Scientific with a short position of Sitronix Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Taiflex Scientific and Sitronix Technology.
Diversification Opportunities for Taiflex Scientific and Sitronix Technology
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Taiflex and Sitronix is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Taiflex Scientific Co and Sitronix Technology Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sitronix Technology Corp and Taiflex Scientific 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 Taiflex Scientific Co are associated (or correlated) with Sitronix Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sitronix Technology Corp has no effect on the direction of Taiflex Scientific i.e., Taiflex Scientific and Sitronix Technology go up and down completely randomly.
Pair Corralation between Taiflex Scientific and Sitronix Technology
Assuming the 90 days trading horizon Taiflex Scientific Co is expected to generate 1.5 times more return on investment than Sitronix Technology. However, Taiflex Scientific is 1.5 times more volatile than Sitronix Technology Corp. It trades about 0.0 of its potential returns per unit of risk. Sitronix Technology Corp is currently generating about -0.1 per unit of risk. 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 |
Taiflex Scientific Co vs. Sitronix Technology Corp
Performance |
| Timeline |
| Taiflex Scientific |
| Sitronix Technology Corp |
Taiflex Scientific and Sitronix Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Taiflex Scientific and Sitronix Technology
The main advantage of trading using opposite Taiflex Scientific and Sitronix Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Taiflex Scientific position performs unexpectedly, Sitronix Technology 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 Sitronix Technology will offset losses from the drop in Sitronix Technology's long position.| Taiflex Scientific vs. Flexium Interconnect | Taiflex Scientific vs. Career Technology MFG | Taiflex Scientific vs. Powertech Technology | Taiflex Scientific vs. Elite Material Co |
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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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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