Correlation Between Sunny Optical and Automatic Data
Can any of the company-specific risk be diversified away by investing in both Sunny Optical and Automatic Data 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 Automatic Data 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 Automatic Data Processing, you can compare the effects of market volatilities on Sunny Optical and Automatic Data 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 Automatic Data. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunny Optical and Automatic Data.
Diversification Opportunities for Sunny Optical and Automatic Data
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sunny and Automatic is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Sunny Optical Technology and Automatic Data Processing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Automatic Data Processing 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 Automatic Data. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Automatic Data Processing has no effect on the direction of Sunny Optical i.e., Sunny Optical and Automatic Data go up and down completely randomly.
Pair Corralation between Sunny Optical and Automatic Data
Assuming the 90 days trading horizon Sunny Optical Technology is expected to generate 2.58 times more return on investment than Automatic Data. However, Sunny Optical is 2.58 times more volatile than Automatic Data Processing. It trades about 0.28 of its potential returns per unit of risk. Automatic Data Processing is currently generating about -0.11 per unit of risk. If you would invest 5,620 in Sunny Optical Technology on September 13, 2024 and sell it today you would earn a total of 980.00 from holding Sunny Optical Technology or generate 17.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sunny Optical Technology vs. Automatic Data Processing
Performance |
| Timeline |
| Sunny Optical Technology |
| Automatic Data Processing |
Sunny Optical and Automatic Data Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sunny Optical and Automatic Data
The main advantage of trading using opposite Sunny Optical and Automatic Data positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunny Optical position performs unexpectedly, Automatic Data 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 Automatic Data will offset losses from the drop in Automatic Data's long position.| Sunny Optical vs. Amedeo Air Four | Sunny Optical vs. Odfjell Drilling | Sunny Optical vs. Aeorema Communications Plc | Sunny Optical vs. Wizz Air Holdings |
| Automatic Data vs. Samsung Electronics Co | Automatic Data vs. Samsung Electronics Co | Automatic Data vs. Hyundai Motor | Automatic Data vs. Reliance Industries Ltd |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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