Correlation Between SUNSEA Telecommunicatio and Kangyue Technology
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By analyzing existing cross correlation between SUNSEA Telecommunications Co and Kangyue Technology Co, you can compare the effects of market volatilities on SUNSEA Telecommunicatio and Kangyue 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 SUNSEA Telecommunicatio with a short position of Kangyue Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of SUNSEA Telecommunicatio and Kangyue Technology.
Diversification Opportunities for SUNSEA Telecommunicatio and Kangyue Technology
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SUNSEA and Kangyue is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding SUNSEA Telecommunications Co and Kangyue Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kangyue Technology 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 Kangyue Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kangyue Technology has no effect on the direction of SUNSEA Telecommunicatio i.e., SUNSEA Telecommunicatio and Kangyue Technology go up and down completely randomly.
Pair Corralation between SUNSEA Telecommunicatio and Kangyue Technology
Assuming the 90 days trading horizon SUNSEA Telecommunications Co is expected to generate 1.86 times more return on investment than Kangyue Technology. However, SUNSEA Telecommunicatio is 1.86 times more volatile than Kangyue Technology Co. It trades about 0.08 of its potential returns per unit of risk. Kangyue Technology Co is currently generating about -0.21 per unit of risk. If you would invest 836.00 in SUNSEA Telecommunications Co on September 25, 2024 and sell it today you would earn a total of 50.00 from holding SUNSEA Telecommunications Co or generate 5.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.45% |
| Values | Daily Returns |
SUNSEA Telecommunications Co vs. Kangyue Technology Co
Performance |
| Timeline |
| SUNSEA Telecommunicatio |
| Kangyue Technology |
SUNSEA Telecommunicatio and Kangyue Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SUNSEA Telecommunicatio and Kangyue Technology
The main advantage of trading using opposite SUNSEA Telecommunicatio and Kangyue Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SUNSEA Telecommunicatio position performs unexpectedly, Kangyue 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 Kangyue Technology will offset losses from the drop in Kangyue Technology's long position.The idea behind SUNSEA Telecommunications Co and Kangyue Technology Co 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.
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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