Correlation Between Orient Semiconductor and Singtex Industrial

Can any of the company-specific risk be diversified away by investing in both Orient Semiconductor and Singtex Industrial 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 Orient Semiconductor and Singtex Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Orient Semiconductor Electronics and Singtex Industrial Co, you can compare the effects of market volatilities on Orient Semiconductor and Singtex Industrial 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 Orient Semiconductor with a short position of Singtex Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Orient Semiconductor and Singtex Industrial.

Diversification Opportunities for Orient Semiconductor and Singtex Industrial

0.72

Correlation Coefficient

Orient Semiconductor  Singtex Industrial

Poor diversification

The 3 months correlation between Orient and Singtex is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Orient Semiconductor Electroni and Singtex Industrial Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Singtex Industrial and Orient 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 Orient Semiconductor Electronics are associated (or correlated) with Singtex Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Singtex Industrial has no effect on the direction of Orient Semiconductor i.e., Orient Semiconductor and Singtex Industrial go up and down completely randomly.

Pair Corralation between Orient Semiconductor and Singtex Industrial

Assuming the 90 days trading horizon Orient Semiconductor Electronics is expected to generate 2.06 times more return on investment than Singtex Industrial. However, Orient Semiconductor is 2.06 times more volatile than Singtex Industrial Co. It trades about 0.06 of its potential returns per unit of risk. Singtex Industrial Co is currently generating about 0.09 per unit of risk. If you would invest  3,460  in Orient Semiconductor Electronics on December 23, 2024 and sell it today you would earn a total of  220.00  from holding Orient Semiconductor Electronics or generate 6.36% return on investment over 90 days.

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

Orient Semiconductor Electroni  vs.  Singtex Industrial Co

Orient Semiconductor

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Orient Semiconductor Electronics are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Orient Semiconductor may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Singtex Industrial

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Singtex Industrial Co are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Singtex Industrial may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Orient Semiconductor and Singtex Industrial

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

The idea behind Orient Semiconductor Electronics and Singtex Industrial Co 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.