Correlation Between Silicon Motion and Xinhua Winshare
Can any of the company-specific risk be diversified away by investing in both Silicon Motion and Xinhua Winshare 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 Xinhua Winshare 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 Xinhua Winshare Publishing, you can compare the effects of market volatilities on Silicon Motion and Xinhua Winshare 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 Xinhua Winshare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Silicon Motion and Xinhua Winshare.
Diversification Opportunities for Silicon Motion and Xinhua Winshare
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Silicon and Xinhua is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Silicon Motion Technology and Xinhua Winshare Publishing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xinhua Winshare Publ 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 Xinhua Winshare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xinhua Winshare Publ has no effect on the direction of Silicon Motion i.e., Silicon Motion and Xinhua Winshare go up and down completely randomly.
Pair Corralation between Silicon Motion and Xinhua Winshare
Assuming the 90 days trading horizon Silicon Motion Technology is expected to generate 1.13 times more return on investment than Xinhua Winshare. However, Silicon Motion is 1.13 times more volatile than Xinhua Winshare Publishing. It trades about 0.01 of its potential returns per unit of risk. Xinhua Winshare Publishing is currently generating about -0.17 per unit of risk. If you would invest 5,250 in Silicon Motion Technology on November 8, 2024 and sell it today you would earn a total of 0.00 from holding Silicon Motion Technology or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Silicon Motion Technology vs. Xinhua Winshare Publishing
Performance |
| Timeline |
| Silicon Motion Technology |
| Xinhua Winshare Publ |
Silicon Motion and Xinhua Winshare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Silicon Motion and Xinhua Winshare
The main advantage of trading using opposite Silicon Motion and Xinhua Winshare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Silicon Motion position performs unexpectedly, Xinhua Winshare 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 Xinhua Winshare will offset losses from the drop in Xinhua Winshare's long position.| Silicon Motion vs. InterContinental Hotels Group | Silicon Motion vs. PULSION Medical Systems | Silicon Motion vs. Peijia Medical Limited | Silicon Motion vs. Summit Hotel Properties |
| Xinhua Winshare vs. DETALION GAMES SA | Xinhua Winshare vs. GAMING FAC SA | Xinhua Winshare vs. CONTAGIOUS GAMING INC | Xinhua Winshare vs. Tradegate AG Wertpapierhandelsbank |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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