Correlation Between Loop Telecommunicatio and Sunny Friend
Can any of the company-specific risk be diversified away by investing in both Loop Telecommunicatio and Sunny Friend 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 Sunny Friend 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 Sunny Friend Environmental, you can compare the effects of market volatilities on Loop Telecommunicatio and Sunny Friend 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 Sunny Friend. Check out your portfolio center. Please also check ongoing floating volatility patterns of Loop Telecommunicatio and Sunny Friend.
Diversification Opportunities for Loop Telecommunicatio and Sunny Friend
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Loop and Sunny is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Loop Telecommunication Interna and Sunny Friend Environmental in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sunny Friend Environ 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 Sunny Friend. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sunny Friend Environ has no effect on the direction of Loop Telecommunicatio i.e., Loop Telecommunicatio and Sunny Friend go up and down completely randomly.
Pair Corralation between Loop Telecommunicatio and Sunny Friend
Assuming the 90 days trading horizon Loop Telecommunication International is expected to under-perform the Sunny Friend. In addition to that, Loop Telecommunicatio is 5.17 times more volatile than Sunny Friend Environmental. It trades about -0.09 of its total potential returns per unit of risk. Sunny Friend Environmental is currently generating about -0.27 per unit of volatility. If you would invest 8,700 in Sunny Friend Environmental on October 23, 2024 and sell it today you would lose (410.00) from holding Sunny Friend Environmental or give up 4.71% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Loop Telecommunication Interna vs. Sunny Friend Environmental
Performance |
| Timeline |
| Loop Telecommunication |
| Sunny Friend Environ |
Loop Telecommunicatio and Sunny Friend Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Loop Telecommunicatio and Sunny Friend
The main advantage of trading using opposite Loop Telecommunicatio and Sunny Friend positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Loop Telecommunicatio position performs unexpectedly, Sunny Friend 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 Friend will offset losses from the drop in Sunny Friend'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 |
| Sunny Friend vs. Cleanaway Co | Sunny Friend vs. Taiwan Secom Co | Sunny Friend vs. ECOVE Environment Corp | Sunny Friend vs. TTET Union 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
Other Complementary Tools
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Equity Valuation Check real value of public entities based on technical and fundamental data | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities |