Correlation Between Sunny Optical and Mkango Resources
Can any of the company-specific risk be diversified away by investing in both Sunny Optical and Mkango Resources 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 Mkango Resources 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 Mkango Resources, you can compare the effects of market volatilities on Sunny Optical and Mkango Resources 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 Mkango Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunny Optical and Mkango Resources.
Diversification Opportunities for Sunny Optical and Mkango Resources
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sunny and Mkango is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Sunny Optical Technology and Mkango Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mkango Resources 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 Mkango Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mkango Resources has no effect on the direction of Sunny Optical i.e., Sunny Optical and Mkango Resources go up and down completely randomly.
Pair Corralation between Sunny Optical and Mkango Resources
Assuming the 90 days trading horizon Sunny Optical Technology is expected to generate 0.75 times more return on investment than Mkango Resources. However, Sunny Optical Technology is 1.33 times less risky than Mkango Resources. It trades about 0.0 of its potential returns per unit of risk. Mkango Resources is currently generating about 0.0 per unit of risk. If you would invest 9,181 in Sunny Optical Technology on September 13, 2024 and sell it today you would lose (2,581) from holding Sunny Optical Technology or give up 28.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 88.76% |
| Values | Daily Returns |
Sunny Optical Technology vs. Mkango Resources
Performance |
| Timeline |
| Sunny Optical Technology |
| Mkango Resources |
Sunny Optical and Mkango Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sunny Optical and Mkango Resources
The main advantage of trading using opposite Sunny Optical and Mkango Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunny Optical position performs unexpectedly, Mkango Resources 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 Mkango Resources will offset losses from the drop in Mkango Resources' 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 |
| Mkango Resources vs. MediaZest plc | Mkango Resources vs. Cognizant Technology Solutions | Mkango Resources vs. Vitec Software Group | Mkango Resources vs. Sunny Optical Technology |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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