Correlation Between Sunnic Technology and FarGlory Hotel
Can any of the company-specific risk be diversified away by investing in both Sunnic Technology and FarGlory Hotel 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 Sunnic Technology and FarGlory Hotel into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sunnic Technology Merchandise and FarGlory Hotel Co, you can compare the effects of market volatilities on Sunnic Technology and FarGlory Hotel 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 Sunnic Technology with a short position of FarGlory Hotel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunnic Technology and FarGlory Hotel.
Diversification Opportunities for Sunnic Technology and FarGlory Hotel
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Sunnic and FarGlory is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Sunnic Technology Merchandise and FarGlory Hotel Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FarGlory Hotel and Sunnic Technology 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 Sunnic Technology Merchandise are associated (or correlated) with FarGlory Hotel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FarGlory Hotel has no effect on the direction of Sunnic Technology i.e., Sunnic Technology and FarGlory Hotel go up and down completely randomly.
Pair Corralation between Sunnic Technology and FarGlory Hotel
Assuming the 90 days trading horizon Sunnic Technology Merchandise is expected to generate 1.85 times more return on investment than FarGlory Hotel. However, Sunnic Technology is 1.85 times more volatile than FarGlory Hotel Co. It trades about 0.03 of its potential returns per unit of risk. FarGlory Hotel Co is currently generating about -0.08 per unit of risk. If you would invest 1,391 in Sunnic Technology Merchandise on September 2, 2024 and sell it today you would earn a total of 179.00 from holding Sunnic Technology Merchandise or generate 12.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sunnic Technology Merchandise vs. FarGlory Hotel Co
Performance |
| Timeline |
| Sunnic Technology |
| FarGlory Hotel |
Sunnic Technology and FarGlory Hotel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sunnic Technology and FarGlory Hotel
The main advantage of trading using opposite Sunnic Technology and FarGlory Hotel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunnic Technology position performs unexpectedly, FarGlory Hotel 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 FarGlory Hotel will offset losses from the drop in FarGlory Hotel's long position.| Sunnic Technology vs. Taiwan Semiconductor Manufacturing | Sunnic Technology vs. MediaTek | Sunnic Technology vs. United Microelectronics | Sunnic Technology vs. Novatek Microelectronics Corp |
| FarGlory Hotel vs. Ambassador Hotel | FarGlory Hotel vs. Lion Travel Service | FarGlory Hotel vs. Chateau International Development | FarGlory Hotel vs. First Hotel 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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