Correlation Between Sunny Optical and Centrica PLC
Can any of the company-specific risk be diversified away by investing in both Sunny Optical and Centrica PLC 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 Centrica PLC 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 Centrica PLC, you can compare the effects of market volatilities on Sunny Optical and Centrica PLC 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 Centrica PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunny Optical and Centrica PLC.
Diversification Opportunities for Sunny Optical and Centrica PLC
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sunny and Centrica is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Sunny Optical Technology and Centrica PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Centrica PLC 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 Centrica PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Centrica PLC has no effect on the direction of Sunny Optical i.e., Sunny Optical and Centrica PLC go up and down completely randomly.
Pair Corralation between Sunny Optical and Centrica PLC
Assuming the 90 days trading horizon Sunny Optical Technology is expected to generate 2.79 times more return on investment than Centrica PLC. However, Sunny Optical is 2.79 times more volatile than Centrica PLC. It trades about 0.15 of its potential returns per unit of risk. Centrica PLC is currently generating about 0.11 per unit of risk. If you would invest 5,315 in Sunny Optical Technology on September 13, 2024 and sell it today you would earn a total of 1,200 from holding Sunny Optical Technology or generate 22.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 97.73% |
| Values | Daily Returns |
Sunny Optical Technology vs. Centrica PLC
Performance |
| Timeline |
| Sunny Optical Technology |
| Centrica PLC |
Sunny Optical and Centrica PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sunny Optical and Centrica PLC
The main advantage of trading using opposite Sunny Optical and Centrica PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunny Optical position performs unexpectedly, Centrica PLC 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 Centrica PLC will offset losses from the drop in Centrica PLC's long position.| Sunny Optical vs. Catena Media PLC | Sunny Optical vs. Liberty Media Corp | Sunny Optical vs. Everyman Media Group | Sunny Optical vs. Grand Vision Media |
| Centrica PLC vs. Indutrade AB | Centrica PLC vs. Various Eateries PLC | Centrica PLC vs. Supermarket Income REIT | Centrica PLC vs. Ecclesiastical Insurance Office |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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