Correlation Between Sunmax Biotechnology and General Plastic
Can any of the company-specific risk be diversified away by investing in both Sunmax Biotechnology and General Plastic 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 General Plastic 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 General Plastic Industrial, you can compare the effects of market volatilities on Sunmax Biotechnology and General Plastic 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 General Plastic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunmax Biotechnology and General Plastic.
Diversification Opportunities for Sunmax Biotechnology and General Plastic
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sunmax and General is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Sunmax Biotechnology Co and General Plastic Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on General Plastic Indu 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 General Plastic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of General Plastic Indu has no effect on the direction of Sunmax Biotechnology i.e., Sunmax Biotechnology and General Plastic go up and down completely randomly.
Pair Corralation between Sunmax Biotechnology and General Plastic
Assuming the 90 days trading horizon Sunmax Biotechnology Co is expected to generate 1.4 times more return on investment than General Plastic. However, Sunmax Biotechnology is 1.4 times more volatile than General Plastic Industrial. It trades about 0.23 of its potential returns per unit of risk. General Plastic Industrial is currently generating about -0.2 per unit of risk. If you would invest 27,150 in Sunmax Biotechnology Co on September 4, 2024 and sell it today you would earn a total of 1,300 from holding Sunmax Biotechnology Co or generate 4.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sunmax Biotechnology Co vs. General Plastic Industrial
Performance |
| Timeline |
| Sunmax Biotechnology |
| General Plastic Indu |
Sunmax Biotechnology and General Plastic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sunmax Biotechnology and General Plastic
The main advantage of trading using opposite Sunmax Biotechnology and General Plastic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunmax Biotechnology position performs unexpectedly, General Plastic 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 General Plastic will offset losses from the drop in General Plastic's long position.| Sunmax Biotechnology vs. Symtek Automation Asia | Sunmax Biotechnology vs. WiseChip Semiconductor | Sunmax Biotechnology vs. Novatek Microelectronics Corp | Sunmax Biotechnology vs. Leader Electronics |
| General Plastic vs. Universal Microelectronics Co | General Plastic vs. AVerMedia Technologies | General Plastic vs. Symtek Automation Asia | General Plastic vs. WiseChip Semiconductor |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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