Correlation Between Sunny Electronics and VAIV
Can any of the company-specific risk be diversified away by investing in both Sunny Electronics and VAIV 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 VAIV 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 VAIV Co, you can compare the effects of market volatilities on Sunny Electronics and VAIV 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 VAIV. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunny Electronics and VAIV.
Diversification Opportunities for Sunny Electronics and VAIV
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sunny and VAIV is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Sunny Electronics Corp and VAIV Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VAIV 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 VAIV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VAIV has no effect on the direction of Sunny Electronics i.e., Sunny Electronics and VAIV go up and down completely randomly.
Pair Corralation between Sunny Electronics and VAIV
Assuming the 90 days trading horizon Sunny Electronics Corp is expected to generate 0.71 times more return on investment than VAIV. However, Sunny Electronics Corp is 1.4 times less risky than VAIV. It trades about 0.01 of its potential returns per unit of risk. VAIV Co is currently generating about -0.03 per unit of risk. If you would invest 258,500 in Sunny Electronics Corp on September 12, 2024 and sell it today you would earn a total of 1,000.00 from holding Sunny Electronics Corp or generate 0.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sunny Electronics Corp vs. VAIV Co
Performance |
| Timeline |
| Sunny Electronics Corp |
| VAIV |
Sunny Electronics and VAIV Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sunny Electronics and VAIV
The main advantage of trading using opposite Sunny Electronics and VAIV positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunny Electronics position performs unexpectedly, VAIV 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 VAIV will offset losses from the drop in VAIV'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 |
| VAIV vs. SKONEC Entertainment Co | VAIV vs. Inzi Display CoLtd | VAIV vs. Tamul Multimedia Co | VAIV vs. Alton Sports CoLtd |
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 Stocks Directory module to find actively traded stocks across global markets.
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