Correlation Between Giant Manufacturing and Sitronix Technology
Can any of the company-specific risk be diversified away by investing in both Giant Manufacturing 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 Giant Manufacturing and Sitronix Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Giant Manufacturing Co and Sitronix Technology Corp, you can compare the effects of market volatilities on Giant Manufacturing 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 Giant Manufacturing with a short position of Sitronix Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Giant Manufacturing and Sitronix Technology.
Diversification Opportunities for Giant Manufacturing and Sitronix Technology
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Giant and Sitronix is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Giant Manufacturing 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 Giant Manufacturing 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 Giant Manufacturing 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 Giant Manufacturing i.e., Giant Manufacturing and Sitronix Technology go up and down completely randomly.
Pair Corralation between Giant Manufacturing and Sitronix Technology
Assuming the 90 days trading horizon Giant Manufacturing Co is expected to under-perform the Sitronix Technology. In addition to that, Giant Manufacturing is 1.09 times more volatile than Sitronix Technology Corp. It trades about -0.03 of its total potential returns per unit of risk. Sitronix Technology Corp is currently generating about -0.01 per unit of volatility. If you would invest 23,900 in Sitronix Technology Corp on September 4, 2024 and sell it today you would lose (3,250) from holding Sitronix Technology Corp or give up 13.6% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Giant Manufacturing Co vs. Sitronix Technology Corp
Performance |
| Timeline |
| Giant Manufacturing |
| Sitronix Technology Corp |
Giant Manufacturing and Sitronix Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Giant Manufacturing and Sitronix Technology
The main advantage of trading using opposite Giant Manufacturing and Sitronix Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Giant Manufacturing 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.| Giant Manufacturing vs. Merida Industry Co | Giant Manufacturing vs. President Chain Store | Giant Manufacturing vs. Cheng Shin Rubber | Giant Manufacturing vs. Uni President Enterprises Corp |
| Sitronix Technology vs. Novatek Microelectronics Corp | Sitronix Technology vs. FocalTech Systems Co | Sitronix Technology vs. Elan Microelectronics Corp | Sitronix Technology vs. Realtek Semiconductor 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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