Correlation Between Grand Ocean and Sun Max
Can any of the company-specific risk be diversified away by investing in both Grand Ocean and Sun Max 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 Grand Ocean and Sun Max into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Grand Ocean Retail and Sun Max Tech, you can compare the effects of market volatilities on Grand Ocean and Sun Max 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 Grand Ocean with a short position of Sun Max. Check out your portfolio center. Please also check ongoing floating volatility patterns of Grand Ocean and Sun Max.
Diversification Opportunities for Grand Ocean and Sun Max
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Grand and Sun is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Grand Ocean Retail and Sun Max Tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sun Max Tech and Grand Ocean 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 Grand Ocean Retail are associated (or correlated) with Sun Max. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sun Max Tech has no effect on the direction of Grand Ocean i.e., Grand Ocean and Sun Max go up and down completely randomly.
Pair Corralation between Grand Ocean and Sun Max
Assuming the 90 days trading horizon Grand Ocean Retail is expected to under-perform the Sun Max. In addition to that, Grand Ocean is 2.01 times more volatile than Sun Max Tech. It trades about -0.13 of its total potential returns per unit of risk. Sun Max Tech is currently generating about 0.08 per unit of volatility. If you would invest 5,100 in Sun Max Tech on August 30, 2024 and sell it today you would earn a total of 150.00 from holding Sun Max Tech or generate 2.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Grand Ocean Retail vs. Sun Max Tech
Performance |
| Timeline |
| Grand Ocean Retail |
| Sun Max Tech |
Grand Ocean and Sun Max Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Grand Ocean and Sun Max
The main advantage of trading using opposite Grand Ocean and Sun Max positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Grand Ocean position performs unexpectedly, Sun Max 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 Sun Max will offset losses from the drop in Sun Max's long position.| Grand Ocean vs. First Steamship Co | Grand Ocean vs. Far Eastern Department | Grand Ocean vs. LongDa Construction Development | Grand Ocean vs. Collins Co |
| Sun Max vs. ASRock Inc | Sun Max vs. Ko Ja Cayman | Sun Max vs. Chenbro Micom Co | Sun Max vs. Leadtek Research |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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