Correlation Between Japan Asia and Silicon Motion
Can any of the company-specific risk be diversified away by investing in both Japan Asia and Silicon Motion 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 Japan Asia and Silicon Motion into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Japan Asia Investment and Silicon Motion Technology, you can compare the effects of market volatilities on Japan Asia and Silicon Motion 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 Japan Asia with a short position of Silicon Motion. Check out your portfolio center. Please also check ongoing floating volatility patterns of Japan Asia and Silicon Motion.
Diversification Opportunities for Japan Asia and Silicon Motion
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Japan and Silicon is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Japan Asia Investment and Silicon Motion Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Silicon Motion Technology and Japan Asia 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 Japan Asia Investment are associated (or correlated) with Silicon Motion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Silicon Motion Technology has no effect on the direction of Japan Asia i.e., Japan Asia and Silicon Motion go up and down completely randomly.
Pair Corralation between Japan Asia and Silicon Motion
Assuming the 90 days horizon Japan Asia Investment is expected to under-perform the Silicon Motion. In addition to that, Japan Asia is 1.37 times more volatile than Silicon Motion Technology. It trades about 0.0 of its total potential returns per unit of risk. Silicon Motion Technology is currently generating about 0.0 per unit of volatility. If you would invest 5,791 in Silicon Motion Technology on September 24, 2024 and sell it today you would lose (691.00) from holding Silicon Motion Technology or give up 11.93% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Japan Asia Investment vs. Silicon Motion Technology
Performance |
| Timeline |
| Japan Asia Investment |
| Silicon Motion Technology |
Japan Asia and Silicon Motion Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Japan Asia and Silicon Motion
The main advantage of trading using opposite Japan Asia and Silicon Motion positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Japan Asia position performs unexpectedly, Silicon Motion 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 Silicon Motion will offset losses from the drop in Silicon Motion's long position.| Japan Asia vs. INDOFOOD AGRI RES | Japan Asia vs. Insurance Australia Group | Japan Asia vs. SBI Insurance Group | Japan Asia vs. Dairy Farm International |
| Silicon Motion vs. REGAL ASIAN INVESTMENTS | Silicon Motion vs. ECHO INVESTMENT ZY | Silicon Motion vs. Japan Asia Investment | Silicon Motion vs. Apollo Investment 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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