Correlation Between Sunny Optical and Telenor ASA
Can any of the company-specific risk be diversified away by investing in both Sunny Optical and Telenor ASA 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 Optical and Telenor ASA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sunny Optical Technology and Telenor ASA, you can compare the effects of market volatilities on Sunny Optical and Telenor ASA 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 Optical with a short position of Telenor ASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunny Optical and Telenor ASA.
Diversification Opportunities for Sunny Optical and Telenor ASA
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Sunny and Telenor is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Sunny Optical Technology and Telenor ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Telenor ASA and Sunny Optical 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 Optical Technology are associated (or correlated) with Telenor ASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Telenor ASA has no effect on the direction of Sunny Optical i.e., Sunny Optical and Telenor ASA go up and down completely randomly.
Pair Corralation between Sunny Optical and Telenor ASA
Assuming the 90 days trading horizon Sunny Optical Technology is expected to generate 4.1 times more return on investment than Telenor ASA. However, Sunny Optical is 4.1 times more volatile than Telenor ASA. It trades about 0.26 of its potential returns per unit of risk. Telenor ASA is currently generating about -0.1 per unit of risk. If you would invest 5,085 in Sunny Optical Technology on September 1, 2024 and sell it today you would earn a total of 1,225 from holding Sunny Optical Technology or generate 24.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Sunny Optical Technology vs. Telenor ASA
Performance |
| Timeline |
| Sunny Optical Technology |
| Telenor ASA |
Sunny Optical and Telenor ASA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sunny Optical and Telenor ASA
The main advantage of trading using opposite Sunny Optical and Telenor ASA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunny Optical position performs unexpectedly, Telenor ASA 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 Telenor ASA will offset losses from the drop in Telenor ASA's long position.| Sunny Optical vs. Take Two Interactive Software | Sunny Optical vs. MT Bank Corp | Sunny Optical vs. UNIQA Insurance Group | Sunny Optical vs. National Bank of |
| Telenor ASA vs. Polar Capital Technology | Telenor ASA vs. DXC Technology Co | Telenor ASA vs. Sunny Optical Technology | Telenor ASA vs. Cognizant Technology Solutions |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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