Correlation Between C Sun and Sunonwealth Electric
Can any of the company-specific risk be diversified away by investing in both C Sun 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 C Sun and Sunonwealth Electric into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between C Sun Manufacturing and Sunonwealth Electric Machine, you can compare the effects of market volatilities on C Sun 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 C Sun with a short position of Sunonwealth Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of C Sun and Sunonwealth Electric.
Diversification Opportunities for C Sun and Sunonwealth Electric
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between 2467 and Sunonwealth is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding C Sun Manufacturing and Sunonwealth Electric Machine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sunonwealth Electric and C Sun 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 C Sun Manufacturing 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 C Sun i.e., C Sun and Sunonwealth Electric go up and down completely randomly.
Pair Corralation between C Sun and Sunonwealth Electric
Assuming the 90 days trading horizon C Sun Manufacturing is expected to generate 1.57 times more return on investment than Sunonwealth Electric. However, C Sun is 1.57 times more volatile than Sunonwealth Electric Machine. It trades about 0.09 of its potential returns per unit of risk. Sunonwealth Electric Machine is currently generating about -0.04 per unit of risk. If you would invest 13,650 in C Sun Manufacturing on August 31, 2024 and sell it today you would earn a total of 6,250 from holding C Sun Manufacturing or generate 45.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
C Sun Manufacturing vs. Sunonwealth Electric Machine
Performance |
| Timeline |
| C Sun Manufacturing |
| Sunonwealth Electric |
C Sun and Sunonwealth Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with C Sun and Sunonwealth Electric
The main advantage of trading using opposite C Sun and Sunonwealth Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if C Sun 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.| C Sun vs. TA I Technology Co | C Sun vs. G Shank Enterprise Co | C Sun vs. Siward Crystal Technology | C Sun vs. Mirle Automation 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
Other Complementary Tools
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments |