Correlation Between New Hope and Sunwave Communications
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By analyzing existing cross correlation between New Hope Dairy and Sunwave Communications Co, you can compare the effects of market volatilities on New Hope 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 New Hope with a short position of Sunwave Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of New Hope and Sunwave Communications.
Diversification Opportunities for New Hope and Sunwave Communications
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between New and Sunwave is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding New Hope Dairy and Sunwave Communications Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sunwave Communications and New Hope 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 New Hope Dairy 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 New Hope i.e., New Hope and Sunwave Communications go up and down completely randomly.
Pair Corralation between New Hope and Sunwave Communications
Assuming the 90 days trading horizon New Hope is expected to generate 1.94 times less return on investment than Sunwave Communications. But when comparing it to its historical volatility, New Hope Dairy is 1.75 times less risky than Sunwave Communications. It trades about 0.21 of its potential returns per unit of risk. Sunwave Communications Co is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 551.00 in Sunwave Communications Co on August 31, 2024 and sell it today you would earn a total of 121.00 from holding Sunwave Communications Co or generate 21.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
New Hope Dairy vs. Sunwave Communications Co
Performance |
| Timeline |
| New Hope Dairy |
| Sunwave Communications |
New Hope and Sunwave Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with New Hope and Sunwave Communications
The main advantage of trading using opposite New Hope and Sunwave Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if New Hope 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.| New Hope vs. Lutian Machinery Co | New Hope vs. PetroChina Co Ltd | New Hope vs. Bank of China | New Hope vs. Gansu Jiu Steel |
| Sunwave Communications vs. Kweichow Moutai Co | Sunwave Communications vs. NAURA Technology Group | Sunwave Communications vs. APT Medical | Sunwave Communications vs. Contemporary Amperex Technology |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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