Correlation Between Sunny Electronics and Atec
Can any of the company-specific risk be diversified away by investing in both Sunny Electronics and Atec at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Sunny Electronics and Atec into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sunny Electronics Corp and Atec Co, you can compare the effects of market volatilities on Sunny Electronics and Atec 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 Sunny Electronics with a short position of Atec. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunny Electronics and Atec.
Diversification Opportunities for Sunny Electronics and Atec
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Sunny and Atec is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Sunny Electronics Corp and Atec Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atec and Sunny Electronics 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 Sunny Electronics Corp are associated (or correlated) with Atec. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atec has no effect on the direction of Sunny Electronics i.e., Sunny Electronics and Atec go up and down completely randomly.
Pair Corralation between Sunny Electronics and Atec
Assuming the 90 days trading horizon Sunny Electronics is expected to generate 7.45 times less return on investment than Atec. But when comparing it to its historical volatility, Sunny Electronics Corp is 1.87 times less risky than Atec. It trades about 0.03 of its potential returns per unit of risk. Atec Co is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 956,027 in Atec Co on September 12, 2024 and sell it today you would earn a total of 3,093,973 from holding Atec Co or generate 323.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sunny Electronics Corp vs. Atec Co
Performance |
| Timeline |
| Sunny Electronics Corp |
| Atec |
Sunny Electronics and Atec Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sunny Electronics and Atec
The main advantage of trading using opposite Sunny Electronics and Atec positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunny Electronics position performs unexpectedly, Atec 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 Atec will offset losses from the drop in Atec's long position.| Sunny Electronics vs. Samsung Electronics Co | Sunny Electronics vs. Samsung Electronics Co | Sunny Electronics vs. SK Hynix | Sunny Electronics vs. POSCO Holdings |
| Atec vs. Sunny Electronics Corp | Atec vs. Daeduck Electronics Co | Atec vs. Hankook Steel Co | Atec vs. Derkwoo Electronics 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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