Correlation Between Sun Sea and Da Cin
Can any of the company-specific risk be diversified away by investing in both Sun Sea and Da Cin 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 Sun Sea and Da Cin into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sun Sea Construction and Da Cin Construction Co, you can compare the effects of market volatilities on Sun Sea and Da Cin 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 Sun Sea with a short position of Da Cin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sun Sea and Da Cin.
Diversification Opportunities for Sun Sea and Da Cin
Poor diversification
The 3 months correlation between Sun and 2535 is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Sun Sea Construction and Da Cin Construction Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Da Cin Construction and Sun Sea 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 Sun Sea Construction are associated (or correlated) with Da Cin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Da Cin Construction has no effect on the direction of Sun Sea i.e., Sun Sea and Da Cin go up and down completely randomly.
Pair Corralation between Sun Sea and Da Cin
Assuming the 90 days trading horizon Sun Sea is expected to generate 1.76 times less return on investment than Da Cin. In addition to that, Sun Sea is 3.4 times more volatile than Da Cin Construction Co. It trades about 0.03 of its total potential returns per unit of risk. Da Cin Construction Co is currently generating about 0.17 per unit of volatility. If you would invest 5,300 in Da Cin Construction Co on October 23, 2024 and sell it today you would earn a total of 120.00 from holding Da Cin Construction Co or generate 2.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sun Sea Construction vs. Da Cin Construction Co
Performance |
| Timeline |
| Sun Sea Construction |
| Da Cin Construction |
Sun Sea and Da Cin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sun Sea and Da Cin
The main advantage of trading using opposite Sun Sea and Da Cin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sun Sea position performs unexpectedly, Da Cin 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 Da Cin will offset losses from the drop in Da Cin's long position.| Sun Sea vs. Thinking Electronic Industrial | Sun Sea vs. Orient Semiconductor Electronics | Sun Sea vs. Vanguard International Semiconductor | Sun Sea vs. C Media Electronics |
| Da Cin vs. Huaku Development Co | Da Cin vs. Highwealth Construction Corp | Da Cin vs. Kindom Construction Corp | Da Cin vs. Kedge Construction 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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