Correlation Between Sunmax Biotechnology and Shan Loong
Can any of the company-specific risk be diversified away by investing in both Sunmax Biotechnology and Shan Loong 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 Sunmax Biotechnology and Shan Loong into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sunmax Biotechnology Co and Shan Loong Transportation Co, you can compare the effects of market volatilities on Sunmax Biotechnology and Shan Loong 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 Sunmax Biotechnology with a short position of Shan Loong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunmax Biotechnology and Shan Loong.
Diversification Opportunities for Sunmax Biotechnology and Shan Loong
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Sunmax and Shan is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding Sunmax Biotechnology Co and Shan Loong Transportation Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shan Loong Transport and Sunmax Biotechnology 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 Sunmax Biotechnology Co are associated (or correlated) with Shan Loong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shan Loong Transport has no effect on the direction of Sunmax Biotechnology i.e., Sunmax Biotechnology and Shan Loong go up and down completely randomly.
Pair Corralation between Sunmax Biotechnology and Shan Loong
Assuming the 90 days trading horizon Sunmax Biotechnology Co is expected to generate 1.58 times more return on investment than Shan Loong. However, Sunmax Biotechnology is 1.58 times more volatile than Shan Loong Transportation Co. It trades about -0.01 of its potential returns per unit of risk. Shan Loong Transportation Co is currently generating about -0.15 per unit of risk. If you would invest 29,016 in Sunmax Biotechnology Co on September 1, 2024 and sell it today you would lose (1,216) from holding Sunmax Biotechnology Co or give up 4.19% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sunmax Biotechnology Co vs. Shan Loong Transportation Co
Performance |
| Timeline |
| Sunmax Biotechnology |
| Shan Loong Transport |
Sunmax Biotechnology and Shan Loong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sunmax Biotechnology and Shan Loong
The main advantage of trading using opposite Sunmax Biotechnology and Shan Loong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunmax Biotechnology position performs unexpectedly, Shan Loong 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 Shan Loong will offset losses from the drop in Shan Loong's long position.| Sunmax Biotechnology vs. Medigen Vaccine Biologics | Sunmax Biotechnology vs. OBI Pharma | Sunmax Biotechnology vs. TaiMed Biologics | Sunmax Biotechnology vs. Tanvex BioPharma |
| Shan Loong vs. Chaintech Technology Corp | Shan Loong vs. AVerMedia Technologies | Shan Loong vs. Avision | Shan Loong vs. Clevo 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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