Correlation Between Aerospace and Sunwave Communications
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By analyzing existing cross correlation between Aerospace Hi Tech Holding and Sunwave Communications Co, you can compare the effects of market volatilities on Aerospace and Sunwave Communications 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 Aerospace with a short position of Sunwave Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Aerospace and Sunwave Communications.
Diversification Opportunities for Aerospace and Sunwave Communications
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Aerospace and Sunwave is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Aerospace Hi Tech Holding and Sunwave Communications Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sunwave Communications and Aerospace 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 Aerospace Hi Tech Holding are associated (or correlated) with Sunwave Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sunwave Communications has no effect on the direction of Aerospace i.e., Aerospace and Sunwave Communications go up and down completely randomly.
Pair Corralation between Aerospace and Sunwave Communications
Assuming the 90 days trading horizon Aerospace Hi Tech Holding is expected to generate 0.86 times more return on investment than Sunwave Communications. However, Aerospace Hi Tech Holding is 1.16 times less risky than Sunwave Communications. It trades about 0.03 of its potential returns per unit of risk. Sunwave Communications Co is currently generating about 0.02 per unit of risk. If you would invest 1,009 in Aerospace Hi Tech Holding on September 2, 2024 and sell it today you would earn a total of 184.00 from holding Aerospace Hi Tech Holding or generate 18.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Aerospace Hi Tech Holding vs. Sunwave Communications Co
Performance |
| Timeline |
| Aerospace Hi Tech |
| Sunwave Communications |
Aerospace and Sunwave Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Aerospace and Sunwave Communications
The main advantage of trading using opposite Aerospace and Sunwave Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Aerospace position performs unexpectedly, Sunwave Communications 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 Sunwave Communications will offset losses from the drop in Sunwave Communications' long position.| Aerospace vs. BYD Co Ltd | Aerospace vs. China Mobile Limited | Aerospace vs. Agricultural Bank of | Aerospace vs. Industrial and Commercial |
| Sunwave Communications vs. Industrial and Commercial | Sunwave Communications vs. Kweichow Moutai Co | Sunwave Communications vs. Agricultural Bank of | Sunwave Communications vs. China Mobile Limited |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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