Correlation Between Sihui Fuji and IRay Technology

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Can any of the company-specific risk be diversified away by investing in both Sihui Fuji and IRay Technology 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 Sihui Fuji and IRay Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sihui Fuji Electronics and iRay Technology Co, you can compare the effects of market volatilities on Sihui Fuji and IRay Technology 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 Sihui Fuji with a short position of IRay Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sihui Fuji and IRay Technology.

Diversification Opportunities for Sihui Fuji and IRay Technology

0.44
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Sihui and IRay is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Sihui Fuji Electronics and iRay Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iRay Technology and Sihui Fuji 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 Sihui Fuji Electronics are associated (or correlated) with IRay Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iRay Technology has no effect on the direction of Sihui Fuji i.e., Sihui Fuji and IRay Technology go up and down completely randomly.

Pair Corralation between Sihui Fuji and IRay Technology

Assuming the 90 days trading horizon Sihui Fuji Electronics is expected to generate 0.92 times more return on investment than IRay Technology. However, Sihui Fuji Electronics is 1.09 times less risky than IRay Technology. It trades about 0.03 of its potential returns per unit of risk. iRay Technology Co is currently generating about -0.04 per unit of risk. If you would invest  2,332  in Sihui Fuji Electronics on September 28, 2024 and sell it today you would earn a total of  565.00  from holding Sihui Fuji Electronics or generate 24.23% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Sihui Fuji Electronics  vs.  iRay Technology Co

 Performance 
       Timeline  
Sihui Fuji Electronics 

Risk-Adjusted Performance

5 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in Sihui Fuji Electronics are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Sihui Fuji sustained solid returns over the last few months and may actually be approaching a breakup point.
iRay Technology 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days iRay Technology Co 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 January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Sihui Fuji and IRay Technology Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Sihui Fuji and IRay Technology

The main advantage of trading using opposite Sihui Fuji and IRay Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sihui Fuji position performs unexpectedly, IRay Technology 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 IRay Technology will offset losses from the drop in IRay Technology's long position.
The idea behind Sihui Fuji Electronics and iRay Technology 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..

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