Correlation Between Sitronix Technology and Visual Photonics

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

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

Diversification Opportunities for Sitronix Technology and Visual Photonics

-0.19

Correlation Coefficient

Sitronix Technology  Visual Photonics

Good diversification

The 3 months correlation between Sitronix and Visual is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Sitronix Technology Corp and Visual Photonics Epitaxy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Visual Photonics Epitaxy and Sitronix Technology 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 Sitronix Technology Corp are associated (or correlated) with Visual Photonics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Visual Photonics Epitaxy has no effect on the direction of Sitronix Technology i.e., Sitronix Technology and Visual Photonics go up and down completely randomly.

Pair Corralation between Sitronix Technology and Visual Photonics

Assuming the 90 days trading horizon Sitronix Technology Corp is expected to generate 0.68 times more return on investment than Visual Photonics. However, Sitronix Technology Corp is 1.47 times less risky than Visual Photonics. It trades about 0.12 of its potential returns per unit of risk. Visual Photonics Epitaxy is currently generating about -0.24 per unit of risk. If you would invest  20,650  in Sitronix Technology Corp on December 4, 2024 and sell it today you would earn a total of  650.00  from holding Sitronix Technology Corp or generate 3.15% return on investment over 90 days.

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

Sitronix Technology Corp  vs.  Visual Photonics Epitaxy

Sitronix Technology Corp

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Sitronix Technology Corp are ranked lower than 1 (%) 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.

Visual Photonics Epitaxy

Risk-Adjusted Performance

Very Weak

Over the last 90 days Visual Photonics Epitaxy has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in April 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Sitronix Technology and Visual Photonics

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

The idea behind Sitronix Technology Corp and Visual Photonics Epitaxy 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.