Correlation Between Sunny Electronics and Phoenix Materials
Can any of the company-specific risk be diversified away by investing in both Sunny Electronics and Phoenix Materials 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 Phoenix Materials 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 Phoenix Materials Co, you can compare the effects of market volatilities on Sunny Electronics and Phoenix Materials 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 Phoenix Materials. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunny Electronics and Phoenix Materials.
Diversification Opportunities for Sunny Electronics and Phoenix Materials
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Sunny and Phoenix is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Sunny Electronics Corp and Phoenix Materials Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Phoenix Materials 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 Phoenix Materials. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Phoenix Materials has no effect on the direction of Sunny Electronics i.e., Sunny Electronics and Phoenix Materials go up and down completely randomly.
Pair Corralation between Sunny Electronics and Phoenix Materials
Assuming the 90 days trading horizon Sunny Electronics Corp is expected to generate 0.39 times more return on investment than Phoenix Materials. However, Sunny Electronics Corp is 2.56 times less risky than Phoenix Materials. It trades about -0.04 of its potential returns per unit of risk. Phoenix Materials Co is currently generating about -0.05 per unit of risk. If you would invest 186,000 in Sunny Electronics Corp on August 28, 2024 and sell it today you would lose (22,700) from holding Sunny Electronics Corp or give up 12.2% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sunny Electronics Corp vs. Phoenix Materials Co
Performance |
| Timeline |
| Sunny Electronics Corp |
| Phoenix Materials |
Sunny Electronics and Phoenix Materials Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sunny Electronics and Phoenix Materials
The main advantage of trading using opposite Sunny Electronics and Phoenix Materials positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunny Electronics position performs unexpectedly, Phoenix Materials 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 Phoenix Materials will offset losses from the drop in Phoenix Materials' long position.| Sunny Electronics vs. AptaBio Therapeutics | Sunny Electronics vs. Daewoo SBI SPAC | Sunny Electronics vs. Dream Security co | Sunny Electronics vs. Microfriend |
| Phoenix Materials vs. Namhae Chemical | Phoenix Materials vs. Seoul Electronics Telecom | Phoenix Materials vs. Sunny Electronics Corp | Phoenix Materials vs. Sungwoo 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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