Correlation Between Sunwave Communications and Guoguang Electric
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By analyzing existing cross correlation between Sunwave Communications Co and Guoguang Electric Co, you can compare the effects of market volatilities on Sunwave Communications and Guoguang Electric 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 Guoguang Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunwave Communications and Guoguang Electric.
Diversification Opportunities for Sunwave Communications and Guoguang Electric
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sunwave and Guoguang is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Sunwave Communications Co and Guoguang Electric Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guoguang Electric 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 Guoguang Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guoguang Electric has no effect on the direction of Sunwave Communications i.e., Sunwave Communications and Guoguang Electric go up and down completely randomly.
Pair Corralation between Sunwave Communications and Guoguang Electric
Assuming the 90 days trading horizon Sunwave Communications Co is expected to generate 1.3 times more return on investment than Guoguang Electric. However, Sunwave Communications is 1.3 times more volatile than Guoguang Electric Co. It trades about 0.34 of its potential returns per unit of risk. Guoguang Electric Co is currently generating about -0.16 per unit of risk. If you would invest 600.00 in Sunwave Communications Co on September 12, 2024 and sell it today you would earn a total of 295.00 from holding Sunwave Communications Co or generate 49.17% 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. Guoguang Electric Co
Performance |
| Timeline |
| Sunwave Communications |
| Guoguang Electric |
Sunwave Communications and Guoguang Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sunwave Communications and Guoguang Electric
The main advantage of trading using opposite Sunwave Communications and Guoguang Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunwave Communications position performs unexpectedly, Guoguang Electric 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 Guoguang Electric will offset losses from the drop in Guoguang Electric's long position.| Sunwave Communications vs. Guangdong Qunxing Toys | Sunwave Communications vs. Sinocat Environmental Technology | Sunwave Communications vs. Juneyao Airlines | Sunwave Communications vs. Hainan Airlines Co |
| Guoguang Electric vs. Huafa Industrial Co | Guoguang Electric vs. By health | Guoguang Electric vs. Tibet Huayu Mining | Guoguang Electric vs. Hainan Mining Co |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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