Correlation Between Sunny Optical and Creo Medical
Can any of the company-specific risk be diversified away by investing in both Sunny Optical and Creo Medical 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 Creo Medical 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 Creo Medical Group, you can compare the effects of market volatilities on Sunny Optical and Creo Medical 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 Creo Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunny Optical and Creo Medical.
Diversification Opportunities for Sunny Optical and Creo Medical
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sunny and Creo is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Sunny Optical Technology and Creo Medical Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Creo Medical Group 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 Creo Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Creo Medical Group has no effect on the direction of Sunny Optical i.e., Sunny Optical and Creo Medical go up and down completely randomly.
Pair Corralation between Sunny Optical and Creo Medical
Assuming the 90 days trading horizon Sunny Optical Technology is expected to under-perform the Creo Medical. But the stock apears to be less risky and, when comparing its historical volatility, Sunny Optical Technology is 1.19 times less risky than Creo Medical. The stock trades about -0.01 of its potential returns per unit of risk. The Creo Medical Group is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 2,000 in Creo Medical Group on October 11, 2024 and sell it today you would lose (25.00) from holding Creo Medical Group or give up 1.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 90.34% |
| Values | Daily Returns |
Sunny Optical Technology vs. Creo Medical Group
Performance |
| Timeline |
| Sunny Optical Technology |
| Creo Medical Group |
Sunny Optical and Creo Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sunny Optical and Creo Medical
The main advantage of trading using opposite Sunny Optical and Creo Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunny Optical position performs unexpectedly, Creo Medical 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 Creo Medical will offset losses from the drop in Creo Medical's long position.| Sunny Optical vs. Waste Management | Sunny Optical vs. Premier Foods PLC | Sunny Optical vs. Monster Beverage Corp | Sunny Optical vs. Flow Traders NV |
| Creo Medical vs. Cognizant Technology Solutions | Creo Medical vs. Ross Stores | Creo Medical vs. Sunny Optical Technology | Creo Medical vs. Vitec Software Group |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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