Correlation Between Sunko Ink and Champion Building
Can any of the company-specific risk be diversified away by investing in both Sunko Ink and Champion Building 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 Sunko Ink and Champion Building into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sunko Ink Co and Champion Building Materials, you can compare the effects of market volatilities on Sunko Ink and Champion Building 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 Sunko Ink with a short position of Champion Building. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunko Ink and Champion Building.
Diversification Opportunities for Sunko Ink and Champion Building
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Sunko and Champion is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Sunko Ink Co and Champion Building Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Champion Building and Sunko Ink 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 Sunko Ink Co are associated (or correlated) with Champion Building. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Champion Building has no effect on the direction of Sunko Ink i.e., Sunko Ink and Champion Building go up and down completely randomly.
Pair Corralation between Sunko Ink and Champion Building
Assuming the 90 days trading horizon Sunko Ink Co is expected to generate 1.17 times more return on investment than Champion Building. However, Sunko Ink is 1.17 times more volatile than Champion Building Materials. It trades about 0.02 of its potential returns per unit of risk. Champion Building Materials is currently generating about 0.02 per unit of risk. If you would invest 1,575 in Sunko Ink Co on September 4, 2024 and sell it today you would earn a total of 230.00 from holding Sunko Ink Co or generate 14.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sunko Ink Co vs. Champion Building Materials
Performance |
| Timeline |
| Sunko Ink |
| Champion Building |
Sunko Ink and Champion Building Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sunko Ink and Champion Building
The main advantage of trading using opposite Sunko Ink and Champion Building positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunko Ink position performs unexpectedly, Champion Building 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 Champion Building will offset losses from the drop in Champion Building's long position.The idea behind Sunko Ink Co and Champion Building Materials pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Champion Building vs. Universal Microelectronics Co | Champion Building vs. AVerMedia Technologies | Champion Building vs. Symtek Automation Asia | Champion Building vs. WiseChip Semiconductor |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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