Correlation Between SAIC and Shannon Semiconductor

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

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

Diversification Opportunities for SAIC and Shannon Semiconductor

0.0

Correlation Coefficient

SAIC  Shannon Semiconductor

Pay attention - limited upside

The 3 months correlation between SAIC and Shannon is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding SAIC Motor Corp and Shannon Semiconductor Technolo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shannon Semiconductor and SAIC 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 SAIC Motor Corp are associated (or correlated) with Shannon Semiconductor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shannon Semiconductor has no effect on the direction of SAIC i.e., SAIC and Shannon Semiconductor go up and down completely randomly.

Pair Corralation between SAIC and Shannon Semiconductor

If you would invest  0.00  in SAIC Motor Corp on October 6, 2024 and sell it today you would earn a total of  0.00  from holding SAIC Motor Corp or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	4.76%
Values	Daily Returns

SAIC Motor Corp  vs.  Shannon Semiconductor Technolo

SAIC Motor Corp

Risk-Adjusted Performance

0 of 100

OK

Over the last 90 days SAIC Motor Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, SAIC is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Shannon Semiconductor

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Shannon Semiconductor 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.

Pair Trading with SAIC and Shannon Semiconductor

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

The idea behind SAIC Motor Corp and Shannon Semiconductor Technology 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.