Correlation Between Sunwave Communications and Lotus Health
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By analyzing existing cross correlation between Sunwave Communications Co and Lotus Health Group, you can compare the effects of market volatilities on Sunwave Communications and Lotus Health 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 Sunwave Communications with a short position of Lotus Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunwave Communications and Lotus Health.
Diversification Opportunities for Sunwave Communications and Lotus Health
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sunwave and Lotus is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Sunwave Communications Co and Lotus Health Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lotus Health Group and Sunwave Communications 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 Sunwave Communications Co are associated (or correlated) with Lotus Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lotus Health Group has no effect on the direction of Sunwave Communications i.e., Sunwave Communications and Lotus Health go up and down completely randomly.
Pair Corralation between Sunwave Communications and Lotus Health
Assuming the 90 days trading horizon Sunwave Communications Co is expected to generate 1.17 times more return on investment than Lotus Health. However, Sunwave Communications is 1.17 times more volatile than Lotus Health Group. It trades about 0.08 of its potential returns per unit of risk. Lotus Health Group is currently generating about 0.05 per unit of risk. If you would invest 522.00 in Sunwave Communications Co on October 14, 2024 and sell it today you would earn a total of 112.00 from holding Sunwave Communications Co or generate 21.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sunwave Communications Co vs. Lotus Health Group
Performance |
| Timeline |
| Sunwave Communications |
| Lotus Health Group |
Sunwave Communications and Lotus Health Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sunwave Communications and Lotus Health
The main advantage of trading using opposite Sunwave Communications and Lotus Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunwave Communications position performs unexpectedly, Lotus Health 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 Lotus Health will offset losses from the drop in Lotus Health's long position.The idea behind Sunwave Communications Co and Lotus Health Group 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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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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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