Correlation Between Sunfon Construction and Sinher Technology
Can any of the company-specific risk be diversified away by investing in both Sunfon Construction and Sinher Technology 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 Sinher Technology 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 Sinher Technology, you can compare the effects of market volatilities on Sunfon Construction and Sinher Technology 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 Sinher Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunfon Construction and Sinher Technology.
Diversification Opportunities for Sunfon Construction and Sinher Technology
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sunfon and Sinher is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Sunfon Construction Co and Sinher Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sinher Technology 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 Sinher Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sinher Technology has no effect on the direction of Sunfon Construction i.e., Sunfon Construction and Sinher Technology go up and down completely randomly.
Pair Corralation between Sunfon Construction and Sinher Technology
Assuming the 90 days trading horizon Sunfon Construction Co is expected to generate 0.57 times more return on investment than Sinher Technology. However, Sunfon Construction Co is 1.75 times less risky than Sinher Technology. It trades about -0.15 of its potential returns per unit of risk. Sinher Technology is currently generating about -0.19 per unit of risk. If you would invest 2,100 in Sunfon Construction Co on August 26, 2024 and sell it today you would lose (55.00) from holding Sunfon Construction Co or give up 2.62% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sunfon Construction Co vs. Sinher Technology
Performance |
| Timeline |
| Sunfon Construction |
| Sinher Technology |
Sunfon Construction and Sinher Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sunfon Construction and Sinher Technology
The main advantage of trading using opposite Sunfon Construction and Sinher Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunfon Construction position performs unexpectedly, Sinher Technology 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 Sinher Technology will offset losses from the drop in Sinher Technology'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 |
| Sinher Technology vs. Hsing Ta Cement | Sinher Technology vs. Capital Futures Corp | Sinher Technology vs. First Insurance Co | Sinher Technology vs. Yem Chio 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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