Correlation Between Sun Race and Mega Financial
Can any of the company-specific risk be diversified away by investing in both Sun Race and Mega Financial 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 Sun Race and Mega Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sun Race Sturmey Archer and Mega Financial Holding, you can compare the effects of market volatilities on Sun Race and Mega Financial 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 Sun Race with a short position of Mega Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sun Race and Mega Financial.
Diversification Opportunities for Sun Race and Mega Financial
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sun and Mega is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Sun Race Sturmey Archer and Mega Financial Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mega Financial Holding and Sun Race 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 Sun Race Sturmey Archer are associated (or correlated) with Mega Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mega Financial Holding has no effect on the direction of Sun Race i.e., Sun Race and Mega Financial go up and down completely randomly.
Pair Corralation between Sun Race and Mega Financial
Assuming the 90 days trading horizon Sun Race Sturmey Archer is expected to under-perform the Mega Financial. In addition to that, Sun Race is 1.47 times more volatile than Mega Financial Holding. It trades about -0.08 of its total potential returns per unit of risk. Mega Financial Holding is currently generating about 0.06 per unit of volatility. If you would invest 2,984 in Mega Financial Holding on August 26, 2024 and sell it today you would earn a total of 991.00 from holding Mega Financial Holding or generate 33.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sun Race Sturmey Archer vs. Mega Financial Holding
Performance |
| Timeline |
| Sun Race Sturmey |
| Mega Financial Holding |
Sun Race and Mega Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sun Race and Mega Financial
The main advantage of trading using opposite Sun Race and Mega Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sun Race position performs unexpectedly, Mega Financial 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 Mega Financial will offset losses from the drop in Mega Financial's long position.| Sun Race vs. Lee Chi Enterprises | Sun Race vs. Basso Industry Corp | Sun Race vs. Giant Manufacturing Co | Sun Race vs. Merida Industry Co |
| Mega Financial vs. CTBC Financial Holding | Mega Financial vs. Fubon Financial Holding | Mega Financial vs. First Financial Holding | Mega Financial vs. Cathay Financial Holding |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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