Correlation Between Sunny Optical and First
Can any of the company-specific risk be diversified away by investing in both Sunny Optical and First 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 First 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 First Class Metals, you can compare the effects of market volatilities on Sunny Optical and First 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 First. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunny Optical and First.
Diversification Opportunities for Sunny Optical and First
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Sunny and First is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Sunny Optical Technology and First Class Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on First Class Metals 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 First. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of First Class Metals has no effect on the direction of Sunny Optical i.e., Sunny Optical and First go up and down completely randomly.
Pair Corralation between Sunny Optical and First
Assuming the 90 days trading horizon Sunny Optical Technology is expected to generate 0.78 times more return on investment than First. However, Sunny Optical Technology is 1.28 times less risky than First. It trades about -0.07 of its potential returns per unit of risk. First Class Metals is currently generating about -0.28 per unit of risk. If you would invest 6,560 in Sunny Optical Technology on October 15, 2024 and sell it today you would lose (305.00) from holding Sunny Optical Technology or give up 4.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sunny Optical Technology vs. First Class Metals
Performance |
| Timeline |
| Sunny Optical Technology |
| First Class Metals |
Sunny Optical and First Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sunny Optical and First
The main advantage of trading using opposite Sunny Optical and First positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunny Optical position performs unexpectedly, First 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 First will offset losses from the drop in First's long position.| Sunny Optical vs. Beeks Trading | Sunny Optical vs. BlackRock Frontiers Investment | Sunny Optical vs. Tavistock Investments Plc | Sunny Optical vs. McEwen Mining |
| First vs. Sunny Optical Technology | First vs. CNH Industrial NV | First vs. Alfa Financial Software | First vs. Aptitude 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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