Correlation Between Digital China and Silitech Technology
Can any of the company-specific risk be diversified away by investing in both Digital China and Silitech 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 Digital China and Silitech Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Digital China Holdings and Silitech Technology Corp, you can compare the effects of market volatilities on Digital China and Silitech 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 Digital China with a short position of Silitech Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Digital China and Silitech Technology.
Diversification Opportunities for Digital China and Silitech Technology
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Digital and Silitech is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Digital China Holdings and Silitech Technology Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Silitech Technology Corp and Digital China 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 Digital China Holdings are associated (or correlated) with Silitech Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Silitech Technology Corp has no effect on the direction of Digital China i.e., Digital China and Silitech Technology go up and down completely randomly.
Pair Corralation between Digital China and Silitech Technology
Assuming the 90 days trading horizon Digital China Holdings is expected to under-perform the Silitech Technology. In addition to that, Digital China is 1.32 times more volatile than Silitech Technology Corp. It trades about 0.0 of its total potential returns per unit of risk. Silitech Technology Corp is currently generating about 0.01 per unit of volatility. If you would invest 3,335 in Silitech Technology Corp on September 26, 2024 and sell it today you would earn a total of 140.00 from holding Silitech Technology Corp or generate 4.2% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 99.79% |
Values | Daily Returns |
Digital China Holdings vs. Silitech Technology Corp
Performance |
Timeline |
Digital China Holdings |
Silitech Technology Corp |
Digital China and Silitech Technology Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Digital China and Silitech Technology
The main advantage of trading using opposite Digital China and Silitech Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Digital China position performs unexpectedly, Silitech 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 Silitech Technology will offset losses from the drop in Silitech Technology's long position.Digital China vs. Acer E Enabling Service | Digital China vs. Sysage Technology Co | Digital China vs. Wistron Information Technology | Digital China vs. Genesis Technology |
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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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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