Correlation Between Kuang Chi and Sunwave Communications
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By analyzing existing cross correlation between Kuang Chi Technologies and Sunwave Communications Co, you can compare the effects of market volatilities on Kuang Chi 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 Kuang Chi with a short position of Sunwave Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kuang Chi and Sunwave Communications.
Diversification Opportunities for Kuang Chi and Sunwave Communications
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kuang and Sunwave is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Kuang Chi Technologies and Sunwave Communications Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sunwave Communications and Kuang Chi 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 Kuang Chi Technologies 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 Kuang Chi i.e., Kuang Chi and Sunwave Communications go up and down completely randomly.
Pair Corralation between Kuang Chi and Sunwave Communications
Assuming the 90 days trading horizon Kuang Chi Technologies is expected to under-perform the Sunwave Communications. But the stock apears to be less risky and, when comparing its historical volatility, Kuang Chi Technologies is 1.6 times less risky than Sunwave Communications. The stock trades about -0.13 of its potential returns per unit of risk. The Sunwave Communications Co is currently generating about 0.48 of returns per unit of risk over similar time horizon. If you would invest 614.00 in Sunwave Communications Co on September 15, 2024 and sell it today you would earn a total of 470.00 from holding Sunwave Communications Co or generate 76.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kuang Chi Technologies vs. Sunwave Communications Co
Performance |
| Timeline |
| Kuang Chi Technologies |
| Sunwave Communications |
Kuang Chi and Sunwave Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kuang Chi and Sunwave Communications
The main advantage of trading using opposite Kuang Chi and Sunwave Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kuang Chi 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.| Kuang Chi vs. BeiGene | Kuang Chi vs. Kweichow Moutai Co | Kuang Chi vs. Beijing Roborock Technology | Kuang Chi vs. G bits Network Technology |
| Sunwave Communications vs. Industrial and Commercial | Sunwave Communications vs. China Construction Bank | Sunwave Communications vs. Bank of China | Sunwave Communications vs. Agricultural Bank of |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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