Correlation Between Chroma ATE and Sinbon Electronics

Can any of the company-specific risk be diversified away by investing in both Chroma ATE and Sinbon Electronics 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 Chroma ATE and Sinbon Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.

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

Diversification Opportunities for Chroma ATE and Sinbon Electronics

-0.56

Correlation Coefficient

Chroma ATE  Sinbon Electronics

Excellent diversification

The 3 months correlation between Chroma and Sinbon is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Chroma ATE and Sinbon Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sinbon Electronics and Chroma ATE 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 Chroma ATE are associated (or correlated) with Sinbon Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sinbon Electronics has no effect on the direction of Chroma ATE i.e., Chroma ATE and Sinbon Electronics go up and down completely randomly.

Pair Corralation between Chroma ATE and Sinbon Electronics

Assuming the 90 days trading horizon Chroma ATE is expected to under-perform the Sinbon Electronics. In addition to that, Chroma ATE is 1.47 times more volatile than Sinbon Electronics Co. It trades about -0.11 of its total potential returns per unit of risk. Sinbon Electronics Co is currently generating about 0.08 per unit of volatility. If you would invest  26,000  in Sinbon Electronics Co on December 21, 2024 and sell it today you would earn a total of  2,350  from holding Sinbon Electronics Co or generate 9.04% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Chroma ATE  vs.  Sinbon Electronics Co

Chroma ATE

Risk-Adjusted Performance

Very Weak

Over the last 90 days Chroma ATE 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 April 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Sinbon Electronics

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Sinbon Electronics Co are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Sinbon Electronics may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Chroma ATE and Sinbon Electronics

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

The idea behind Chroma ATE and Sinbon Electronics 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.