Correlation Between Lion Biotechnologies and Sunny Optical
Can any of the company-specific risk be diversified away by investing in both Lion Biotechnologies and Sunny Optical 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 Lion Biotechnologies and Sunny Optical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lion Biotechnologies and Sunny Optical Technology, you can compare the effects of market volatilities on Lion Biotechnologies and Sunny Optical 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 Lion Biotechnologies with a short position of Sunny Optical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lion Biotechnologies and Sunny Optical.
Diversification Opportunities for Lion Biotechnologies and Sunny Optical
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Lion and Sunny is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Lion Biotechnologies and Sunny Optical Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sunny Optical Technology and Lion Biotechnologies 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 Lion Biotechnologies are associated (or correlated) with Sunny Optical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sunny Optical Technology has no effect on the direction of Lion Biotechnologies i.e., Lion Biotechnologies and Sunny Optical go up and down completely randomly.
Pair Corralation between Lion Biotechnologies and Sunny Optical
Assuming the 90 days trading horizon Lion Biotechnologies is expected to under-perform the Sunny Optical. In addition to that, Lion Biotechnologies is 1.26 times more volatile than Sunny Optical Technology. It trades about -0.1 of its total potential returns per unit of risk. Sunny Optical Technology is currently generating about 0.23 per unit of volatility. If you would invest 578.00 in Sunny Optical Technology on August 28, 2024 and sell it today you would earn a total of 124.00 from holding Sunny Optical Technology or generate 21.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lion Biotechnologies vs. Sunny Optical Technology
Performance |
| Timeline |
| Lion Biotechnologies |
| Sunny Optical Technology |
Lion Biotechnologies and Sunny Optical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lion Biotechnologies and Sunny Optical
The main advantage of trading using opposite Lion Biotechnologies and Sunny Optical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lion Biotechnologies position performs unexpectedly, Sunny Optical 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 Sunny Optical will offset losses from the drop in Sunny Optical's long position.| Lion Biotechnologies vs. Nucletron Electronic Aktiengesellschaft | Lion Biotechnologies vs. ELECTRONIC ARTS | Lion Biotechnologies vs. Electronic Arts | Lion Biotechnologies vs. BYD ELECTRONIC |
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 Stocks Directory module to find actively traded stocks across global markets.
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