Correlation Between Sunonwealth Electric and Asia Metal
Can any of the company-specific risk be diversified away by investing in both Sunonwealth Electric and Asia Metal 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 Sunonwealth Electric and Asia Metal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sunonwealth Electric Machine and Asia Metal Industries, you can compare the effects of market volatilities on Sunonwealth Electric and Asia Metal 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 Sunonwealth Electric with a short position of Asia Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunonwealth Electric and Asia Metal.
Diversification Opportunities for Sunonwealth Electric and Asia Metal
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Sunonwealth and Asia is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Sunonwealth Electric Machine and Asia Metal Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asia Metal Industries and Sunonwealth Electric 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 Sunonwealth Electric Machine are associated (or correlated) with Asia Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asia Metal Industries has no effect on the direction of Sunonwealth Electric i.e., Sunonwealth Electric and Asia Metal go up and down completely randomly.
Pair Corralation between Sunonwealth Electric and Asia Metal
Assuming the 90 days trading horizon Sunonwealth Electric Machine is expected to generate 0.87 times more return on investment than Asia Metal. However, Sunonwealth Electric Machine is 1.15 times less risky than Asia Metal. It trades about -0.02 of its potential returns per unit of risk. Asia Metal Industries is currently generating about -0.07 per unit of risk. If you would invest 10,700 in Sunonwealth Electric Machine on August 24, 2024 and sell it today you would lose (200.00) from holding Sunonwealth Electric Machine or give up 1.87% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sunonwealth Electric Machine vs. Asia Metal Industries
Performance |
| Timeline |
| Sunonwealth Electric |
| Asia Metal Industries |
Sunonwealth Electric and Asia Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sunonwealth Electric and Asia Metal
The main advantage of trading using opposite Sunonwealth Electric and Asia Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunonwealth Electric position performs unexpectedly, Asia Metal 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 Asia Metal will offset losses from the drop in Asia Metal's long position.| Sunonwealth Electric vs. Sunny Friend Environmental | Sunonwealth Electric vs. Taiwan Secom Co | Sunonwealth Electric vs. TTET Union Corp | Sunonwealth Electric vs. ECOVE Environment Corp |
| Asia Metal vs. Golden Friends | Asia Metal vs. Sunonwealth Electric Machine | Asia Metal vs. Rechi Precision Co | Asia Metal vs. Fittech Co |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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