Correlation Between Dexon Technology and SC Asset
Can any of the company-specific risk be diversified away by investing in both Dexon Technology and SC Asset 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 Dexon Technology and SC Asset into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dexon Technology PCL and SC Asset, you can compare the effects of market volatilities on Dexon Technology and SC Asset 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 Dexon Technology with a short position of SC Asset. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dexon Technology and SC Asset.
Diversification Opportunities for Dexon Technology and SC Asset
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Dexon and SC Asset is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Dexon Technology PCL and SC Asset in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SC Asset and Dexon Technology 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 Dexon Technology PCL are associated (or correlated) with SC Asset. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SC Asset has no effect on the direction of Dexon Technology i.e., Dexon Technology and SC Asset go up and down completely randomly.
Pair Corralation between Dexon Technology and SC Asset
Assuming the 90 days trading horizon Dexon Technology PCL is expected to generate 1.34 times more return on investment than SC Asset. However, Dexon Technology is 1.34 times more volatile than SC Asset. It trades about -0.08 of its potential returns per unit of risk. SC Asset is currently generating about -0.14 per unit of risk. If you would invest 156.00 in Dexon Technology PCL on September 14, 2024 and sell it today you would lose (4.00) from holding Dexon Technology PCL or give up 2.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dexon Technology PCL vs. SC Asset
Performance |
| Timeline |
| Dexon Technology PCL |
| SC Asset |
Dexon Technology and SC Asset Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dexon Technology and SC Asset
The main advantage of trading using opposite Dexon Technology and SC Asset positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dexon Technology position performs unexpectedly, SC Asset 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 SC Asset will offset losses from the drop in SC Asset's long position.| Dexon Technology vs. Namwiwat Medical | Dexon Technology vs. LH Hotel Leasehold | Dexon Technology vs. Intermedical Care and | Dexon Technology vs. Asia Medical Agricultural |
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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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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