Correlation Between Sunny Optical and Bankers Investment
Can any of the company-specific risk be diversified away by investing in both Sunny Optical and Bankers Investment 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 Bankers Investment 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 Bankers Investment Trust, you can compare the effects of market volatilities on Sunny Optical and Bankers Investment 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 Bankers Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunny Optical and Bankers Investment.
Diversification Opportunities for Sunny Optical and Bankers Investment
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sunny and Bankers is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Sunny Optical Technology and Bankers Investment Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bankers Investment Trust 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 Bankers Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bankers Investment Trust has no effect on the direction of Sunny Optical i.e., Sunny Optical and Bankers Investment go up and down completely randomly.
Pair Corralation between Sunny Optical and Bankers Investment
Assuming the 90 days trading horizon Sunny Optical Technology is expected to generate 3.32 times more return on investment than Bankers Investment. However, Sunny Optical is 3.32 times more volatile than Bankers Investment Trust. It trades about 0.12 of its potential returns per unit of risk. Bankers Investment Trust is currently generating about 0.26 per unit of risk. If you would invest 6,675 in Sunny Optical Technology on November 6, 2024 and sell it today you would earn a total of 550.00 from holding Sunny Optical Technology or generate 8.24% 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. Bankers Investment Trust
Performance |
| Timeline |
| Sunny Optical Technology |
| Bankers Investment Trust |
Sunny Optical and Bankers Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sunny Optical and Bankers Investment
The main advantage of trading using opposite Sunny Optical and Bankers Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunny Optical position performs unexpectedly, Bankers Investment 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 Bankers Investment will offset losses from the drop in Bankers Investment's long position.| Sunny Optical vs. Ondine Biomedical | Sunny Optical vs. Gamma Communications PLC | Sunny Optical vs. Spirent Communications plc | Sunny Optical vs. Medical Properties Trust |
| Bankers Investment vs. Gamma Communications PLC | Bankers Investment vs. Zoom Video Communications | Bankers Investment vs. Litigation Capital Management | Bankers Investment vs. Aeorema Communications Plc |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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