Correlation Between Silicon Motion and HF FOODS
Can any of the company-specific risk be diversified away by investing in both Silicon Motion and HF FOODS 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 Silicon Motion and HF FOODS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Silicon Motion Technology and HF FOODS GRP, you can compare the effects of market volatilities on Silicon Motion and HF FOODS 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 Silicon Motion with a short position of HF FOODS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Silicon Motion and HF FOODS.
Diversification Opportunities for Silicon Motion and HF FOODS
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Silicon and 3GX is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Silicon Motion Technology and HF FOODS GRP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HF FOODS GRP and Silicon Motion 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 Silicon Motion Technology are associated (or correlated) with HF FOODS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HF FOODS GRP has no effect on the direction of Silicon Motion i.e., Silicon Motion and HF FOODS go up and down completely randomly.
Pair Corralation between Silicon Motion and HF FOODS
Assuming the 90 days trading horizon Silicon Motion Technology is expected to generate 1.02 times more return on investment than HF FOODS. However, Silicon Motion is 1.02 times more volatile than HF FOODS GRP. It trades about -0.05 of its potential returns per unit of risk. HF FOODS GRP is currently generating about -0.43 per unit of risk. If you would invest 5,100 in Silicon Motion Technology on October 20, 2024 and sell it today you would lose (120.00) from holding Silicon Motion Technology or give up 2.35% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Silicon Motion Technology vs. HF FOODS GRP
Performance |
| Timeline |
| Silicon Motion Technology |
| HF FOODS GRP |
Silicon Motion and HF FOODS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Silicon Motion and HF FOODS
The main advantage of trading using opposite Silicon Motion and HF FOODS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Silicon Motion position performs unexpectedly, HF FOODS 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 HF FOODS will offset losses from the drop in HF FOODS's long position.| Silicon Motion vs. THRACE PLASTICS | Silicon Motion vs. CarsalesCom | Silicon Motion vs. CITIC Telecom International | Silicon Motion vs. Geely Automobile Holdings |
| HF FOODS vs. Mitsui Chemicals | HF FOODS vs. Silicon Motion Technology | HF FOODS vs. Sanyo Chemical Industries | HF FOODS vs. INDO RAMA SYNTHETIC |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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