Correlation Between Sunny Optical and Sabre Insurance
Can any of the company-specific risk be diversified away by investing in both Sunny Optical and Sabre Insurance 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 Sabre Insurance 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 Sabre Insurance Group, you can compare the effects of market volatilities on Sunny Optical and Sabre Insurance 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 Sabre Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunny Optical and Sabre Insurance.
Diversification Opportunities for Sunny Optical and Sabre Insurance
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Sunny and Sabre is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Sunny Optical Technology and Sabre Insurance Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sabre Insurance 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 Sabre Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sabre Insurance Group has no effect on the direction of Sunny Optical i.e., Sunny Optical and Sabre Insurance go up and down completely randomly.
Pair Corralation between Sunny Optical and Sabre Insurance
Assuming the 90 days trading horizon Sunny Optical Technology is expected to generate 2.19 times more return on investment than Sabre Insurance. However, Sunny Optical is 2.19 times more volatile than Sabre Insurance Group. It trades about 0.02 of its potential returns per unit of risk. Sabre Insurance Group is currently generating about 0.0 per unit of risk. If you would invest 6,519 in Sunny Optical Technology on October 25, 2024 and sell it today you would earn a total of 426.00 from holding Sunny Optical Technology or generate 6.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 96.78% |
| Values | Daily Returns |
Sunny Optical Technology vs. Sabre Insurance Group
Performance |
| Timeline |
| Sunny Optical Technology |
| Sabre Insurance Group |
Sunny Optical and Sabre Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sunny Optical and Sabre Insurance
The main advantage of trading using opposite Sunny Optical and Sabre Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunny Optical position performs unexpectedly, Sabre Insurance 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 Sabre Insurance will offset losses from the drop in Sabre Insurance's long position.| Sunny Optical vs. Polar Capital Technology | Sunny Optical vs. Prosiebensat 1 Media | Sunny Optical vs. Software Circle plc | Sunny Optical vs. SMA Solar Technology |
| Sabre Insurance vs. Games Workshop Group | Sabre Insurance vs. Auto Trader Group | Sabre Insurance vs. Coor Service Management | Sabre Insurance vs. iShares Dow Jones |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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