Correlation Between Sunspring Metal and Chung Fu
Can any of the company-specific risk be diversified away by investing in both Sunspring Metal and Chung Fu 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 Sunspring Metal and Chung Fu into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sunspring Metal Corp and Chung Fu Tex International, you can compare the effects of market volatilities on Sunspring Metal and Chung Fu 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 Sunspring Metal with a short position of Chung Fu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunspring Metal and Chung Fu.
Diversification Opportunities for Sunspring Metal and Chung Fu
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sunspring and Chung is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Sunspring Metal Corp and Chung Fu Tex International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chung Fu Tex and Sunspring Metal 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 Sunspring Metal Corp are associated (or correlated) with Chung Fu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chung Fu Tex has no effect on the direction of Sunspring Metal i.e., Sunspring Metal and Chung Fu go up and down completely randomly.
Pair Corralation between Sunspring Metal and Chung Fu
Assuming the 90 days trading horizon Sunspring Metal Corp is expected to under-perform the Chung Fu. In addition to that, Sunspring Metal is 1.23 times more volatile than Chung Fu Tex International. It trades about -0.18 of its total potential returns per unit of risk. Chung Fu Tex International is currently generating about -0.19 per unit of volatility. If you would invest 4,745 in Chung Fu Tex International on August 28, 2024 and sell it today you would lose (455.00) from holding Chung Fu Tex International or give up 9.59% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sunspring Metal Corp vs. Chung Fu Tex International
Performance |
| Timeline |
| Sunspring Metal Corp |
| Chung Fu Tex |
Sunspring Metal and Chung Fu Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sunspring Metal and Chung Fu
The main advantage of trading using opposite Sunspring Metal and Chung Fu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunspring Metal position performs unexpectedly, Chung Fu 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 Chung Fu will offset losses from the drop in Chung Fu's long position.| Sunspring Metal vs. Sunny Friend Environmental | Sunspring Metal vs. TTET Union Corp | Sunspring Metal vs. ECOVE Environment Corp | Sunspring Metal vs. Yulon Finance Corp |
| Chung Fu vs. Chainqui Construction Development | Chung Fu vs. Zinwell | Chung Fu vs. Symtek Automation Asia | Chung Fu vs. CTCI 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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