Correlation Between Sunny Optical and Lundin Mining
Can any of the company-specific risk be diversified away by investing in both Sunny Optical and Lundin Mining 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 Lundin Mining 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 Lundin Mining Corp, you can compare the effects of market volatilities on Sunny Optical and Lundin Mining 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 Lundin Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunny Optical and Lundin Mining.
Diversification Opportunities for Sunny Optical and Lundin Mining
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sunny and Lundin is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Sunny Optical Technology and Lundin Mining Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lundin Mining Corp 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 Lundin Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lundin Mining Corp has no effect on the direction of Sunny Optical i.e., Sunny Optical and Lundin Mining go up and down completely randomly.
Pair Corralation between Sunny Optical and Lundin Mining
Assuming the 90 days trading horizon Sunny Optical Technology is expected to generate 1.75 times more return on investment than Lundin Mining. However, Sunny Optical is 1.75 times more volatile than Lundin Mining Corp. It trades about 0.26 of its potential returns per unit of risk. Lundin Mining Corp is currently generating about 0.07 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 | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sunny Optical Technology vs. Lundin Mining Corp
Performance |
| Timeline |
| Sunny Optical Technology |
| Lundin Mining Corp |
Sunny Optical and Lundin Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sunny Optical and Lundin Mining
The main advantage of trading using opposite Sunny Optical and Lundin Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunny Optical position performs unexpectedly, Lundin Mining 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 Lundin Mining will offset losses from the drop in Lundin Mining'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 |
| Lundin Mining vs. Lowland Investment Co | Lundin Mining vs. Axfood AB | Lundin Mining vs. CleanTech Lithium plc | Lundin Mining vs. Flow Traders NV |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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