Correlation Between Phison Electronics and StShine Optical
Can any of the company-specific risk be diversified away by investing in both Phison Electronics and StShine Optical 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 Phison Electronics and StShine Optical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Phison Electronics and StShine Optical Co, you can compare the effects of market volatilities on Phison Electronics and StShine Optical 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 Phison Electronics with a short position of StShine Optical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Phison Electronics and StShine Optical.
Diversification Opportunities for Phison Electronics and StShine Optical
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Phison and StShine is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Phison Electronics and StShine Optical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on StShine Optical and Phison Electronics 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 Phison Electronics are associated (or correlated) with StShine Optical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of StShine Optical has no effect on the direction of Phison Electronics i.e., Phison Electronics and StShine Optical go up and down completely randomly.
Pair Corralation between Phison Electronics and StShine Optical
Assuming the 90 days trading horizon Phison Electronics is expected to generate 1.68 times more return on investment than StShine Optical. However, Phison Electronics is 1.68 times more volatile than StShine Optical Co. It trades about 0.02 of its potential returns per unit of risk. StShine Optical Co is currently generating about 0.02 per unit of risk. If you would invest 52,251 in Phison Electronics on December 11, 2024 and sell it today you would earn a total of 4,449 from holding Phison Electronics or generate 8.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Phison Electronics vs. StShine Optical Co
Performance |
| Timeline |
| Phison Electronics |
| StShine Optical |
Phison Electronics and StShine Optical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Phison Electronics and StShine Optical
The main advantage of trading using opposite Phison Electronics and StShine Optical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Phison Electronics position performs unexpectedly, StShine Optical 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 StShine Optical will offset losses from the drop in StShine Optical's long position.| Phison Electronics vs. Century Iron And | ||
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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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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