Correlation Between Sunfon Construction and Pan International
Can any of the company-specific risk be diversified away by investing in both Sunfon Construction and Pan International 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 Sunfon Construction and Pan International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sunfon Construction Co and Pan International Industrial Corp, you can compare the effects of market volatilities on Sunfon Construction and Pan International 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 Sunfon Construction with a short position of Pan International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunfon Construction and Pan International.
Diversification Opportunities for Sunfon Construction and Pan International
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Sunfon and Pan is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding Sunfon Construction Co and Pan International Industrial C in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pan International and Sunfon Construction 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 Sunfon Construction Co are associated (or correlated) with Pan International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pan International has no effect on the direction of Sunfon Construction i.e., Sunfon Construction and Pan International go up and down completely randomly.
Pair Corralation between Sunfon Construction and Pan International
Assuming the 90 days trading horizon Sunfon Construction Co is expected to generate 0.97 times more return on investment than Pan International. However, Sunfon Construction Co is 1.03 times less risky than Pan International. It trades about 0.02 of its potential returns per unit of risk. Pan International Industrial Corp is currently generating about 0.0 per unit of risk. If you would invest 1,810 in Sunfon Construction Co on August 27, 2024 and sell it today you would earn a total of 235.00 from holding Sunfon Construction Co or generate 12.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sunfon Construction Co vs. Pan International Industrial C
Performance |
| Timeline |
| Sunfon Construction |
| Pan International |
Sunfon Construction and Pan International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sunfon Construction and Pan International
The main advantage of trading using opposite Sunfon Construction and Pan International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunfon Construction position performs unexpectedly, Pan International 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 Pan International will offset losses from the drop in Pan International's long position.| Sunfon Construction vs. Run Long Construction | Sunfon Construction vs. Chong Hong Construction | Sunfon Construction vs. JSL Construction Development | Sunfon Construction vs. Delpha Construction Co |
| Pan International vs. Novatek Microelectronics Corp | Pan International vs. Quanta Computer | Pan International vs. United Microelectronics |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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