Correlation Between Foxsemicon Integrated and Sitronix Technology

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

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

Diversification Opportunities for Foxsemicon Integrated and Sitronix Technology

0.35

Correlation Coefficient

Foxsemicon Integrated  Sitronix Technology

Weak diversification

The 3 months correlation between Foxsemicon and Sitronix is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Foxsemicon Integrated Technolo and Sitronix Technology Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sitronix Technology Corp and Foxsemicon Integrated 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 Foxsemicon Integrated Technology are associated (or correlated) with Sitronix Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sitronix Technology Corp has no effect on the direction of Foxsemicon Integrated i.e., Foxsemicon Integrated and Sitronix Technology go up and down completely randomly.

Pair Corralation between Foxsemicon Integrated and Sitronix Technology

Assuming the 90 days trading horizon Foxsemicon Integrated Technology is expected to under-perform the Sitronix Technology. In addition to that, Foxsemicon Integrated is 1.32 times more volatile than Sitronix Technology Corp. It trades about -0.01 of its total potential returns per unit of risk. Sitronix Technology Corp is currently generating about 0.04 per unit of volatility. If you would invest  20,700  in Sitronix Technology Corp on December 3, 2024 and sell it today you would earn a total of  600.00  from holding Sitronix Technology Corp or generate 2.9% return on investment over 90 days.

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

Foxsemicon Integrated Technolo  vs.  Sitronix Technology Corp

Foxsemicon Integrated

Risk-Adjusted Performance

Very Weak

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

Sitronix Technology Corp

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Sitronix Technology Corp are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. 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.

Pair Trading with Foxsemicon Integrated and Sitronix Technology

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

The idea behind Foxsemicon Integrated Technology and Sitronix Technology Corp 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.