Correlation Between Phison Electronics and Sheng Yu
Can any of the company-specific risk be diversified away by investing in both Phison Electronics and Sheng Yu 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 Sheng Yu into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Phison Electronics and Sheng Yu Steel, you can compare the effects of market volatilities on Phison Electronics and Sheng Yu 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 Sheng Yu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Phison Electronics and Sheng Yu.
Diversification Opportunities for Phison Electronics and Sheng Yu
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Phison and Sheng is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Phison Electronics and Sheng Yu Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sheng Yu Steel 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 Sheng Yu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sheng Yu Steel has no effect on the direction of Phison Electronics i.e., Phison Electronics and Sheng Yu go up and down completely randomly.
Pair Corralation between Phison Electronics and Sheng Yu
Assuming the 90 days trading horizon Phison Electronics is expected to generate 3.21 times more return on investment than Sheng Yu. However, Phison Electronics is 3.21 times more volatile than Sheng Yu Steel. It trades about 0.01 of its potential returns per unit of risk. Sheng Yu Steel is currently generating about -0.28 per unit of risk. If you would invest 46,650 in Phison Electronics on September 5, 2024 and sell it today you would lose (100.00) from holding Phison Electronics or give up 0.21% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Phison Electronics vs. Sheng Yu Steel
Performance |
| Timeline |
| Phison Electronics |
| Sheng Yu Steel |
Phison Electronics and Sheng Yu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Phison Electronics and Sheng Yu
The main advantage of trading using opposite Phison Electronics and Sheng Yu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Phison Electronics position performs unexpectedly, Sheng Yu 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 Sheng Yu will offset losses from the drop in Sheng Yu's long position.| Phison Electronics vs. Sheng Yu Steel | Phison Electronics vs. Taiwan Chinsan Electronic | Phison Electronics vs. Sunny Friend Environmental | Phison Electronics vs. Yeou Yih Steel |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated |