Correlation Between Sinopower Semiconductor and Asia Metal
Can any of the company-specific risk be diversified away by investing in both Sinopower Semiconductor and Asia Metal 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 Sinopower Semiconductor and Asia Metal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sinopower Semiconductor and Asia Metal Industries, you can compare the effects of market volatilities on Sinopower Semiconductor and Asia Metal 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 Sinopower Semiconductor with a short position of Asia Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sinopower Semiconductor and Asia Metal.
Diversification Opportunities for Sinopower Semiconductor and Asia Metal
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Sinopower and Asia is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Sinopower Semiconductor and Asia Metal Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asia Metal Industries and Sinopower Semiconductor 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 Sinopower Semiconductor are associated (or correlated) with Asia Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asia Metal Industries has no effect on the direction of Sinopower Semiconductor i.e., Sinopower Semiconductor and Asia Metal go up and down completely randomly.
Pair Corralation between Sinopower Semiconductor and Asia Metal
Assuming the 90 days trading horizon Sinopower Semiconductor is expected to under-perform the Asia Metal. But the stock apears to be less risky and, when comparing its historical volatility, Sinopower Semiconductor is 1.61 times less risky than Asia Metal. The stock trades about -0.03 of its potential returns per unit of risk. The Asia Metal Industries is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 8,010 in Asia Metal Industries on September 12, 2024 and sell it today you would earn a total of 620.00 from holding Asia Metal Industries or generate 7.74% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Sinopower Semiconductor vs. Asia Metal Industries
Performance |
Timeline |
Sinopower Semiconductor |
Asia Metal Industries |
Sinopower Semiconductor and Asia Metal Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Sinopower Semiconductor and Asia Metal
The main advantage of trading using opposite Sinopower Semiconductor and Asia Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sinopower Semiconductor position performs unexpectedly, Asia Metal 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 Asia Metal will offset losses from the drop in Asia Metal's long position.Sinopower Semiconductor vs. WIN Semiconductors | Sinopower Semiconductor vs. GlobalWafers Co | Sinopower Semiconductor vs. Novatek Microelectronics Corp | Sinopower Semiconductor vs. Ruentex Development Co |
Asia Metal vs. Highlight Tech | Asia Metal vs. Ruentex Development Co | Asia Metal vs. WiseChip Semiconductor | Asia Metal vs. Novatek Microelectronics 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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