Correlation Between Loop Telecommunicatio and Sunfon Construction
Can any of the company-specific risk be diversified away by investing in both Loop Telecommunicatio and Sunfon Construction 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 Loop Telecommunicatio and Sunfon Construction into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Loop Telecommunication International and Sunfon Construction Co, you can compare the effects of market volatilities on Loop Telecommunicatio and Sunfon Construction 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 Loop Telecommunicatio with a short position of Sunfon Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Loop Telecommunicatio and Sunfon Construction.
Diversification Opportunities for Loop Telecommunicatio and Sunfon Construction
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Loop and Sunfon is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Loop Telecommunication Interna and Sunfon Construction Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sunfon Construction and Loop Telecommunicatio 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 Loop Telecommunication International are associated (or correlated) with Sunfon Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sunfon Construction has no effect on the direction of Loop Telecommunicatio i.e., Loop Telecommunicatio and Sunfon Construction go up and down completely randomly.
Pair Corralation between Loop Telecommunicatio and Sunfon Construction
Assuming the 90 days trading horizon Loop Telecommunication International is expected to generate 2.94 times more return on investment than Sunfon Construction. However, Loop Telecommunicatio is 2.94 times more volatile than Sunfon Construction Co. It trades about 0.07 of its potential returns per unit of risk. Sunfon Construction Co is currently generating about -0.17 per unit of risk. If you would invest 7,150 in Loop Telecommunication International on August 30, 2024 and sell it today you would earn a total of 230.00 from holding Loop Telecommunication International or generate 3.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Loop Telecommunication Interna vs. Sunfon Construction Co
Performance |
| Timeline |
| Loop Telecommunication |
| Sunfon Construction |
Loop Telecommunicatio and Sunfon Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Loop Telecommunicatio and Sunfon Construction
The main advantage of trading using opposite Loop Telecommunicatio and Sunfon Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Loop Telecommunicatio position performs unexpectedly, Sunfon Construction 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 Sunfon Construction will offset losses from the drop in Sunfon Construction's long position.| Loop Telecommunicatio vs. Edimax Technology Co | Loop Telecommunicatio vs. Billion Electric Co | Loop Telecommunicatio vs. CyberTAN Technology | Loop Telecommunicatio vs. Emerging Display Technologies |
| Sunfon Construction vs. Loop Telecommunication International | Sunfon Construction vs. TWOWAY Communications | Sunfon Construction vs. Professional Computer Technology | Sunfon Construction vs. Great Computer |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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