Correlation Between Sunny Optical and Cembra Money
Can any of the company-specific risk be diversified away by investing in both Sunny Optical and Cembra Money 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 Cembra Money 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 Cembra Money Bank, you can compare the effects of market volatilities on Sunny Optical and Cembra Money 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 Cembra Money. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunny Optical and Cembra Money.
Diversification Opportunities for Sunny Optical and Cembra Money
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sunny and Cembra is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Sunny Optical Technology and Cembra Money Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cembra Money Bank 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 Cembra Money. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cembra Money Bank has no effect on the direction of Sunny Optical i.e., Sunny Optical and Cembra Money go up and down completely randomly.
Pair Corralation between Sunny Optical and Cembra Money
Assuming the 90 days trading horizon Sunny Optical Technology is expected to generate 4.86 times more return on investment than Cembra Money. However, Sunny Optical is 4.86 times more volatile than Cembra Money Bank. It trades about 0.25 of its potential returns per unit of risk. Cembra Money Bank is currently generating about 0.22 per unit of risk. If you would invest 5,055 in Sunny Optical Technology on August 31, 2024 and sell it today you would earn a total of 1,130 from holding Sunny Optical Technology or generate 22.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sunny Optical Technology vs. Cembra Money Bank
Performance |
| Timeline |
| Sunny Optical Technology |
| Cembra Money Bank |
Sunny Optical and Cembra Money Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sunny Optical and Cembra Money
The main advantage of trading using opposite Sunny Optical and Cembra Money positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunny Optical position performs unexpectedly, Cembra Money 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 Cembra Money will offset losses from the drop in Cembra Money's long position.| Sunny Optical vs. Neometals | Sunny Optical vs. Coor Service Management | Sunny Optical vs. Aeorema Communications Plc | Sunny Optical vs. JLEN Environmental Assets |
| Cembra Money vs. Neometals | Cembra Money vs. Coor Service Management | Cembra Money vs. Aeorema Communications Plc | Cembra Money vs. JLEN Environmental Assets |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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