Correlation Between Sitronix Technology and Space Shuttle

Can any of the company-specific risk be diversified away by investing in both Sitronix Technology and Space Shuttle 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 Sitronix Technology and Space Shuttle into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Sitronix Technology Corp and Space Shuttle Hi Tech, you can compare the effects of market volatilities on Sitronix Technology and Space Shuttle 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 Sitronix Technology with a short position of Space Shuttle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sitronix Technology and Space Shuttle.

Diversification Opportunities for Sitronix Technology and Space Shuttle

0.84

Correlation Coefficient

Sitronix Technology  Space Shuttle

Very poor diversification

The 3 months correlation between Sitronix and Space is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Sitronix Technology Corp and Space Shuttle Hi Tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Space Shuttle Hi and Sitronix Technology 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 Sitronix Technology Corp are associated (or correlated) with Space Shuttle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Space Shuttle Hi has no effect on the direction of Sitronix Technology i.e., Sitronix Technology and Space Shuttle go up and down completely randomly.

Pair Corralation between Sitronix Technology and Space Shuttle

Assuming the 90 days trading horizon Sitronix Technology Corp is expected to generate 0.82 times more return on investment than Space Shuttle. However, Sitronix Technology Corp is 1.22 times less risky than Space Shuttle. It trades about -0.05 of its potential returns per unit of risk. Space Shuttle Hi Tech is currently generating about -0.15 per unit of risk. If you would invest  22,700  in Sitronix Technology Corp on September 24, 2024 and sell it today you would lose (1,050) from holding Sitronix Technology Corp or give up 4.63% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

Sitronix Technology Corp  vs.  Space Shuttle Hi Tech

Sitronix Technology Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sitronix Technology Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Sitronix Technology is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Space Shuttle Hi

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Space Shuttle Hi Tech has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Sitronix Technology and Space Shuttle

The main advantage of trading using opposite Sitronix Technology and Space Shuttle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sitronix Technology position performs unexpectedly, Space Shuttle 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 Space Shuttle will offset losses from the drop in Space Shuttle's long position.

The idea behind Sitronix Technology Corp and Space Shuttle Hi Tech pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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.