Correlation Between SUNSEA Telecommunicatio and New Hope
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By analyzing existing cross correlation between SUNSEA Telecommunications Co and New Hope Dairy, you can compare the effects of market volatilities on SUNSEA Telecommunicatio and New Hope 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 SUNSEA Telecommunicatio with a short position of New Hope. Check out your portfolio center. Please also check ongoing floating volatility patterns of SUNSEA Telecommunicatio and New Hope.
Diversification Opportunities for SUNSEA Telecommunicatio and New Hope
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between SUNSEA and New is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding SUNSEA Telecommunications Co and New Hope Dairy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Hope Dairy and SUNSEA Telecommunicatio 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 SUNSEA Telecommunications Co are associated (or correlated) with New Hope. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Hope Dairy has no effect on the direction of SUNSEA Telecommunicatio i.e., SUNSEA Telecommunicatio and New Hope go up and down completely randomly.
Pair Corralation between SUNSEA Telecommunicatio and New Hope
Assuming the 90 days trading horizon SUNSEA Telecommunications Co is expected to under-perform the New Hope. In addition to that, SUNSEA Telecommunicatio is 1.37 times more volatile than New Hope Dairy. It trades about -0.16 of its total potential returns per unit of risk. New Hope Dairy is currently generating about 0.01 per unit of volatility. If you would invest 1,229 in New Hope Dairy on August 27, 2024 and sell it today you would earn a total of 0.00 from holding New Hope Dairy or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
SUNSEA Telecommunications Co vs. New Hope Dairy
Performance |
| Timeline |
| SUNSEA Telecommunicatio |
| New Hope Dairy |
SUNSEA Telecommunicatio and New Hope Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SUNSEA Telecommunicatio and New Hope
The main advantage of trading using opposite SUNSEA Telecommunicatio and New Hope positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SUNSEA Telecommunicatio position performs unexpectedly, New Hope 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 New Hope will offset losses from the drop in New Hope's long position.The idea behind SUNSEA Telecommunications Co and New Hope Dairy 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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