Correlation Between Sunny Optical and Wizz Air
Can any of the company-specific risk be diversified away by investing in both Sunny Optical and Wizz Air 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 Wizz Air 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 Wizz Air Holdings, you can compare the effects of market volatilities on Sunny Optical and Wizz Air 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 Wizz Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunny Optical and Wizz Air.
Diversification Opportunities for Sunny Optical and Wizz Air
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Sunny and Wizz is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Sunny Optical Technology and Wizz Air Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wizz Air Holdings 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 Wizz Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wizz Air Holdings has no effect on the direction of Sunny Optical i.e., Sunny Optical and Wizz Air go up and down completely randomly.
Pair Corralation between Sunny Optical and Wizz Air
Assuming the 90 days trading horizon Sunny Optical Technology is expected to generate 0.8 times more return on investment than Wizz Air. However, Sunny Optical Technology is 1.25 times less risky than Wizz Air. It trades about 0.36 of its potential returns per unit of risk. Wizz Air Holdings is currently generating about 0.1 per unit of risk. If you would invest 5,890 in Sunny Optical Technology on September 24, 2024 and sell it today you would earn a total of 1,295 from holding Sunny Optical Technology or generate 21.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sunny Optical Technology vs. Wizz Air Holdings
Performance |
| Timeline |
| Sunny Optical Technology |
| Wizz Air Holdings |
Sunny Optical and Wizz Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sunny Optical and Wizz Air
The main advantage of trading using opposite Sunny Optical and Wizz Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunny Optical position performs unexpectedly, Wizz Air 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 Wizz Air will offset losses from the drop in Wizz Air's long position.| Sunny Optical vs. Uniper SE | Sunny Optical vs. Mulberry Group PLC | Sunny Optical vs. London Security Plc | Sunny Optical vs. Triad Group PLC |
| Wizz Air vs. International Biotechnology Trust | Wizz Air vs. Sunny Optical Technology | Wizz Air vs. Spotify Technology SA | Wizz Air vs. Cizzle Biotechnology Holdings |
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 Valuation module to check real value of public entities based on technical and fundamental data.
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