Correlation Between CoAsia Microelectronics and Sitronix Technology
Can any of the company-specific risk be diversified away by investing in both CoAsia Microelectronics 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 CoAsia Microelectronics and Sitronix Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CoAsia Microelectronics and Sitronix Technology Corp, you can compare the effects of market volatilities on CoAsia Microelectronics 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 CoAsia Microelectronics with a short position of Sitronix Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of CoAsia Microelectronics and Sitronix Technology.
Diversification Opportunities for CoAsia Microelectronics and Sitronix Technology
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CoAsia and Sitronix is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding CoAsia Microelectronics 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 CoAsia Microelectronics 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 CoAsia Microelectronics 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 CoAsia Microelectronics i.e., CoAsia Microelectronics and Sitronix Technology go up and down completely randomly.
Pair Corralation between CoAsia Microelectronics and Sitronix Technology
Assuming the 90 days trading horizon CoAsia Microelectronics is expected to under-perform the Sitronix Technology. In addition to that, CoAsia Microelectronics is 2.18 times more volatile than Sitronix Technology Corp. It trades about -0.08 of its total potential returns per unit of risk. Sitronix Technology Corp is currently generating about -0.07 per unit of volatility. 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 |
CoAsia Microelectronics vs. Sitronix Technology Corp
Performance |
| Timeline |
| CoAsia Microelectronics |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Sitronix Technology Corp |
CoAsia Microelectronics and Sitronix Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CoAsia Microelectronics and Sitronix Technology
The main advantage of trading using opposite CoAsia Microelectronics and Sitronix Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CoAsia Microelectronics 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.| CoAsia Microelectronics vs. Promise Technology | CoAsia Microelectronics vs. Intai Technology | CoAsia Microelectronics vs. Double Bond Chemical | CoAsia Microelectronics vs. Grand Pacific Petrochemical |
| Sitronix Technology vs. AU Optronics | Sitronix Technology vs. Innolux Corp | Sitronix Technology vs. Ruentex Development Co | Sitronix Technology vs. WiseChip Semiconductor |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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