Correlation Between Sunny Electronics and Hwashin Precision
Can any of the company-specific risk be diversified away by investing in both Sunny Electronics and Hwashin Precision 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 Hwashin Precision 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 Hwashin Precision Engineering, you can compare the effects of market volatilities on Sunny Electronics and Hwashin Precision 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 Hwashin Precision. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunny Electronics and Hwashin Precision.
Diversification Opportunities for Sunny Electronics and Hwashin Precision
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Sunny and Hwashin is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Sunny Electronics Corp and Hwashin Precision Engineering in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hwashin Precision 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 Hwashin Precision. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hwashin Precision has no effect on the direction of Sunny Electronics i.e., Sunny Electronics and Hwashin Precision go up and down completely randomly.
Pair Corralation between Sunny Electronics and Hwashin Precision
Assuming the 90 days trading horizon Sunny Electronics Corp is expected to under-perform the Hwashin Precision. In addition to that, Sunny Electronics is 1.65 times more volatile than Hwashin Precision Engineering. It trades about -0.03 of its total potential returns per unit of risk. Hwashin Precision Engineering is currently generating about -0.03 per unit of volatility. If you would invest 155,523 in Hwashin Precision Engineering on September 4, 2024 and sell it today you would lose (37,623) from holding Hwashin Precision Engineering or give up 24.19% 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. Hwashin Precision Engineering
Performance |
| Timeline |
| Sunny Electronics Corp |
| Hwashin Precision |
Sunny Electronics and Hwashin Precision Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sunny Electronics and Hwashin Precision
The main advantage of trading using opposite Sunny Electronics and Hwashin Precision positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunny Electronics position performs unexpectedly, Hwashin Precision 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 Hwashin Precision will offset losses from the drop in Hwashin Precision's long position.| Sunny Electronics vs. AptaBio Therapeutics | Sunny Electronics vs. Daewoo SBI SPAC | Sunny Electronics vs. Dream Security co | Sunny Electronics vs. Microfriend |
| Hwashin Precision vs. Ecocab Co | Hwashin Precision vs. Daedong Gear Co | Hwashin Precision vs. YOUNGHWA TECH Co | Hwashin Precision vs. CBI 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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