Correlation Between Silicon Craft and AJ Advance
Can any of the company-specific risk be diversified away by investing in both Silicon Craft and AJ Advance 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 Craft and AJ Advance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Silicon Craft Technology and AJ Advance Technology, you can compare the effects of market volatilities on Silicon Craft and AJ Advance 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 Craft with a short position of AJ Advance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Silicon Craft and AJ Advance.
Diversification Opportunities for Silicon Craft and AJ Advance
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Silicon and AJA is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Silicon Craft Technology and AJ Advance Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AJ Advance Technology and Silicon Craft 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 Craft Technology are associated (or correlated) with AJ Advance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AJ Advance Technology has no effect on the direction of Silicon Craft i.e., Silicon Craft and AJ Advance go up and down completely randomly.
Pair Corralation between Silicon Craft and AJ Advance
Assuming the 90 days trading horizon Silicon Craft Technology is expected to under-perform the AJ Advance. But the stock apears to be less risky and, when comparing its historical volatility, Silicon Craft Technology is 1.05 times less risky than AJ Advance. The stock trades about -0.17 of its potential returns per unit of risk. The AJ Advance Technology is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 18.00 in AJ Advance Technology on September 19, 2024 and sell it today you would lose (2.00) from holding AJ Advance Technology or give up 11.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Silicon Craft Technology vs. AJ Advance Technology
Performance |
| Timeline |
| Silicon Craft Technology |
| AJ Advance Technology |
Silicon Craft and AJ Advance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Silicon Craft and AJ Advance
The main advantage of trading using opposite Silicon Craft and AJ Advance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Silicon Craft position performs unexpectedly, AJ Advance 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 AJ Advance will offset losses from the drop in AJ Advance's long position.| Silicon Craft vs. North East Rubbers | Silicon Craft vs. Mega Lifesciences Public | Silicon Craft vs. KCE Electronics Public | Silicon Craft vs. Singer Thailand Public |
| AJ Advance vs. AAPICO Hitech Public | AJ Advance vs. Haad Thip Public | AJ Advance vs. Italian Thai Development Public |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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