Correlation Between Sunny Electronics and Chinyang Hold
Can any of the company-specific risk be diversified away by investing in both Sunny Electronics and Chinyang Hold 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 Chinyang Hold 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 Chinyang Hold, you can compare the effects of market volatilities on Sunny Electronics and Chinyang Hold 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 Chinyang Hold. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunny Electronics and Chinyang Hold.
Diversification Opportunities for Sunny Electronics and Chinyang Hold
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Sunny and Chinyang is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Sunny Electronics Corp and Chinyang Hold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chinyang Hold 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 Chinyang Hold. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chinyang Hold has no effect on the direction of Sunny Electronics i.e., Sunny Electronics and Chinyang Hold go up and down completely randomly.
Pair Corralation between Sunny Electronics and Chinyang Hold
Assuming the 90 days trading horizon Sunny Electronics Corp is expected to generate 16.74 times more return on investment than Chinyang Hold. However, Sunny Electronics is 16.74 times more volatile than Chinyang Hold. It trades about 0.3 of its potential returns per unit of risk. Chinyang Hold is currently generating about -0.29 per unit of risk. If you would invest 165,400 in Sunny Electronics Corp on September 12, 2024 and sell it today you would earn a total of 94,100 from holding Sunny Electronics Corp or generate 56.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sunny Electronics Corp vs. Chinyang Hold
Performance |
| Timeline |
| Sunny Electronics Corp |
| Chinyang Hold |
Sunny Electronics and Chinyang Hold Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sunny Electronics and Chinyang Hold
The main advantage of trading using opposite Sunny Electronics and Chinyang Hold positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunny Electronics position performs unexpectedly, Chinyang Hold 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 Chinyang Hold will offset losses from the drop in Chinyang Hold'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 |
| Chinyang Hold vs. LG Chemicals | Chinyang Hold vs. POSCO Holdings | Chinyang Hold vs. Hanwha Solutions | Chinyang Hold vs. Lotte Chemical Corp |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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