Correlation Between E Ink and Sensortek Technology
Can any of the company-specific risk be diversified away by investing in both E Ink and Sensortek 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 E Ink and Sensortek Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between E Ink Holdings and Sensortek Technology Corp, you can compare the effects of market volatilities on E Ink and Sensortek 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 E Ink with a short position of Sensortek Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of E Ink and Sensortek Technology.
Diversification Opportunities for E Ink and Sensortek Technology
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between 8069 and Sensortek is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding E Ink Holdings and Sensortek Technology Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sensortek Technology Corp and E Ink 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 E Ink Holdings are associated (or correlated) with Sensortek Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sensortek Technology Corp has no effect on the direction of E Ink i.e., E Ink and Sensortek Technology go up and down completely randomly.
Pair Corralation between E Ink and Sensortek Technology
Assuming the 90 days trading horizon E Ink Holdings is expected to generate 0.95 times more return on investment than Sensortek Technology. However, E Ink Holdings is 1.05 times less risky than Sensortek Technology. It trades about -0.03 of its potential returns per unit of risk. Sensortek Technology Corp is currently generating about -0.04 per unit of risk. If you would invest 30,500 in E Ink Holdings on November 28, 2024 and sell it today you would lose (2,900) from holding E Ink Holdings or give up 9.51% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
E Ink Holdings vs. Sensortek Technology Corp
Performance |
| Timeline |
| E Ink Holdings |
| Sensortek Technology Corp |
E Ink and Sensortek Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with E Ink and Sensortek Technology
The main advantage of trading using opposite E Ink and Sensortek Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if E Ink position performs unexpectedly, Sensortek 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 Sensortek Technology will offset losses from the drop in Sensortek Technology's long position.| E Ink vs. Unimicron Technology Corp | E Ink vs. Innolux Corp | E Ink vs. Delta Electronics | E Ink vs. Novatek Microelectronics Corp |
| Sensortek Technology vs. Aspeed Technology | Sensortek Technology vs. Asmedia Technology | Sensortek Technology vs. eMemory Technology | Sensortek Technology vs. Sitronix Technology 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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