Correlation Between Kaulin Mfg and Sunny Friend
Can any of the company-specific risk be diversified away by investing in both Kaulin Mfg and Sunny Friend 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 Kaulin Mfg and Sunny Friend into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kaulin Mfg and Sunny Friend Environmental, you can compare the effects of market volatilities on Kaulin Mfg and Sunny Friend 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 Kaulin Mfg with a short position of Sunny Friend. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kaulin Mfg and Sunny Friend.
Diversification Opportunities for Kaulin Mfg and Sunny Friend
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Kaulin and Sunny is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Kaulin Mfg and Sunny Friend Environmental in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sunny Friend Environ and Kaulin Mfg 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 Kaulin Mfg are associated (or correlated) with Sunny Friend. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sunny Friend Environ has no effect on the direction of Kaulin Mfg i.e., Kaulin Mfg and Sunny Friend go up and down completely randomly.
Pair Corralation between Kaulin Mfg and Sunny Friend
Assuming the 90 days trading horizon Kaulin Mfg is expected to generate 2.27 times more return on investment than Sunny Friend. However, Kaulin Mfg is 2.27 times more volatile than Sunny Friend Environmental. It trades about 0.12 of its potential returns per unit of risk. Sunny Friend Environmental is currently generating about -0.1 per unit of risk. If you would invest 1,445 in Kaulin Mfg on August 29, 2024 and sell it today you would earn a total of 145.00 from holding Kaulin Mfg or generate 10.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kaulin Mfg vs. Sunny Friend Environmental
Performance |
| Timeline |
| Kaulin Mfg |
| Sunny Friend Environ |
Kaulin Mfg and Sunny Friend Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kaulin Mfg and Sunny Friend
The main advantage of trading using opposite Kaulin Mfg and Sunny Friend positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kaulin Mfg position performs unexpectedly, Sunny Friend 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 Sunny Friend will offset losses from the drop in Sunny Friend's long position.| Kaulin Mfg vs. Sunny Friend Environmental | Kaulin Mfg vs. TTET Union Corp | Kaulin Mfg vs. ECOVE Environment Corp | Kaulin Mfg vs. Yulon Finance Corp |
| Sunny Friend vs. Cleanaway Co | Sunny Friend vs. Taiwan Secom Co | Sunny Friend vs. ECOVE Environment Corp | Sunny Friend vs. TTET Union Corp |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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