Correlation Between S Tech and Sunonwealth Electric
Can any of the company-specific risk be diversified away by investing in both S Tech and Sunonwealth Electric 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 S Tech and Sunonwealth Electric into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between S Tech Corp and Sunonwealth Electric Machine, you can compare the effects of market volatilities on S Tech and Sunonwealth Electric 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 S Tech with a short position of Sunonwealth Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of S Tech and Sunonwealth Electric.
Diversification Opportunities for S Tech and Sunonwealth Electric
-0.59 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between 1584 and Sunonwealth is -0.59. Overlapping area represents the amount of risk that can be diversified away by holding S Tech Corp and Sunonwealth Electric Machine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sunonwealth Electric and S Tech 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 S Tech Corp are associated (or correlated) with Sunonwealth Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sunonwealth Electric has no effect on the direction of S Tech i.e., S Tech and Sunonwealth Electric go up and down completely randomly.
Pair Corralation between S Tech and Sunonwealth Electric
Assuming the 90 days trading horizon S Tech Corp is expected to under-perform the Sunonwealth Electric. But the stock apears to be less risky and, when comparing its historical volatility, S Tech Corp is 2.71 times less risky than Sunonwealth Electric. The stock trades about -0.17 of its potential returns per unit of risk. The Sunonwealth Electric Machine is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 10,150 in Sunonwealth Electric Machine on August 27, 2024 and sell it today you would earn a total of 350.00 from holding Sunonwealth Electric Machine or generate 3.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
S Tech Corp vs. Sunonwealth Electric Machine
Performance |
| Timeline |
| S Tech Corp |
| Sunonwealth Electric |
S Tech and Sunonwealth Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with S Tech and Sunonwealth Electric
The main advantage of trading using opposite S Tech and Sunonwealth Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if S Tech position performs unexpectedly, Sunonwealth Electric 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 Sunonwealth Electric will offset losses from the drop in Sunonwealth Electric's long position.| S Tech vs. Catcher Technology Co | S Tech vs. Solar Applied Materials | S Tech vs. Shin Zu Shing | S Tech vs. China Metal Products |
| Sunonwealth Electric vs. Sunny Friend Environmental | Sunonwealth Electric vs. TTET Union Corp | Sunonwealth Electric vs. ECOVE Environment Corp | Sunonwealth Electric vs. Yulon Finance 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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