Correlation Between Silkroad Visual and Fuzhou Rockchip

Can any of the company-specific risk be diversified away by investing in both Silkroad Visual and Fuzhou Rockchip 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 Silkroad Visual and Fuzhou Rockchip into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Silkroad Visual Technology and Fuzhou Rockchip Electronics, you can compare the effects of market volatilities on Silkroad Visual and Fuzhou Rockchip 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 Silkroad Visual with a short position of Fuzhou Rockchip. Check out your portfolio center. Please also check ongoing floating volatility patterns of Silkroad Visual and Fuzhou Rockchip.

Diversification Opportunities for Silkroad Visual and Fuzhou Rockchip

0.17

Correlation Coefficient

Silkroad Visual  Fuzhou Rockchip

Average diversification

The 3 months correlation between Silkroad and Fuzhou is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Silkroad Visual Technology and Fuzhou Rockchip Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fuzhou Rockchip Elec and Silkroad Visual 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 Silkroad Visual Technology are associated (or correlated) with Fuzhou Rockchip. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fuzhou Rockchip Elec has no effect on the direction of Silkroad Visual i.e., Silkroad Visual and Fuzhou Rockchip go up and down completely randomly.

Pair Corralation between Silkroad Visual and Fuzhou Rockchip

Assuming the 90 days trading horizon Silkroad Visual Technology is expected to under-perform the Fuzhou Rockchip. In addition to that, Silkroad Visual is 1.06 times more volatile than Fuzhou Rockchip Electronics. It trades about -0.08 of its total potential returns per unit of risk. Fuzhou Rockchip Electronics is currently generating about 0.14 per unit of volatility. If you would invest  7,148  in Fuzhou Rockchip Electronics on October 8, 2024 and sell it today you would earn a total of  2,801  from holding Fuzhou Rockchip Electronics or generate 39.19% return on investment over 90 days.

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

Silkroad Visual Technology  vs.  Fuzhou Rockchip Electronics

Silkroad Visual Tech

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Silkroad Visual Technology has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Fuzhou Rockchip Elec

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Fuzhou Rockchip Electronics are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Fuzhou Rockchip sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Silkroad Visual and Fuzhou Rockchip

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

The idea behind Silkroad Visual Technology and Fuzhou Rockchip Electronics 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..