Correlation Between Ingentec and Sinbon Electronics
Can any of the company-specific risk be diversified away by investing in both Ingentec 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 Ingentec and Sinbon Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ingentec and Sinbon Electronics Co, you can compare the effects of market volatilities on Ingentec 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 Ingentec with a short position of Sinbon Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ingentec and Sinbon Electronics.
Diversification Opportunities for Ingentec and Sinbon Electronics
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Ingentec and Sinbon is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Ingentec and Sinbon Electronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sinbon Electronics and Ingentec 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 Ingentec 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 Ingentec i.e., Ingentec and Sinbon Electronics go up and down completely randomly.
Pair Corralation between Ingentec and Sinbon Electronics
Assuming the 90 days trading horizon Ingentec is expected to under-perform the Sinbon Electronics. In addition to that, Ingentec is 1.17 times more volatile than Sinbon Electronics Co. It trades about -0.23 of its total potential returns per unit of risk. Sinbon Electronics Co is currently generating about -0.15 per unit of volatility. If you would invest 30,400 in Sinbon Electronics Co on September 24, 2024 and sell it today you would lose (5,000) from holding Sinbon Electronics Co or give up 16.45% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Ingentec vs. Sinbon Electronics Co
Performance |
Timeline |
Ingentec |
Sinbon Electronics |
Ingentec and Sinbon Electronics Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Ingentec and Sinbon Electronics
The main advantage of trading using opposite Ingentec and Sinbon Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ingentec 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.Ingentec vs. Taita Chemical Co | Ingentec vs. Shih Kuen Plastics | Ingentec vs. Hsinli Chemical Industrial | Ingentec vs. Grand Pacific Petrochemical |
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Check out your portfolio center.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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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