Correlation Between Sunny Optical and Investment
Can any of the company-specific risk be diversified away by investing in both Sunny Optical and 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 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 The Investment, you can compare the effects of market volatilities on Sunny Optical and 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 Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunny Optical and Investment.
Diversification Opportunities for Sunny Optical and Investment
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Sunny and Investment is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Sunny Optical Technology and The Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Investment 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 Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Investment has no effect on the direction of Sunny Optical i.e., Sunny Optical and Investment go up and down completely randomly.
Pair Corralation between Sunny Optical and Investment
Assuming the 90 days trading horizon Sunny Optical Technology is expected to under-perform the Investment. In addition to that, Sunny Optical is 3.61 times more volatile than The Investment. It trades about 0.0 of its total potential returns per unit of risk. The Investment is currently generating about 0.07 per unit of volatility. If you would invest 26,700 in The Investment on September 3, 2024 and sell it today you would earn a total of 10,900 from holding The Investment or generate 40.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 88.35% |
| Values | Daily Returns |
Sunny Optical Technology vs. The Investment
Performance |
| Timeline |
| Sunny Optical Technology |
| Investment |
Sunny Optical and Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sunny Optical and Investment
The main advantage of trading using opposite Sunny Optical and Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunny Optical position performs unexpectedly, 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 Investment will offset losses from the drop in Investment's long position.| Sunny Optical vs. Catalyst Media Group | Sunny Optical vs. CATLIN GROUP | Sunny Optical vs. Tamburi Investment Partners | Sunny Optical vs. Magnora ASA |
| Investment vs. CAP LEASE AVIATION | Investment vs. Infrastrutture Wireless Italiane | Investment vs. UNIQA Insurance Group | Investment vs. Verizon Communications |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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