Correlation Between Great Sun and Lander Sports

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Can any of the company-specific risk be diversified away by investing in both Great Sun and Lander Sports 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 Great Sun and Lander Sports into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Great Sun Foods Co and Lander Sports Development, you can compare the effects of market volatilities on Great Sun and Lander Sports 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 Great Sun with a short position of Lander Sports. Check out your portfolio center. Please also check ongoing floating volatility patterns of Great Sun and Lander Sports.

Diversification Opportunities for Great Sun and Lander Sports

0.21
  Correlation Coefficient

Modest diversification

The 3 months correlation between Great and Lander is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Great Sun Foods Co and Lander Sports Development in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lander Sports Development and Great Sun 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 Great Sun Foods Co are associated (or correlated) with Lander Sports. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lander Sports Development has no effect on the direction of Great Sun i.e., Great Sun and Lander Sports go up and down completely randomly.

Pair Corralation between Great Sun and Lander Sports

Assuming the 90 days trading horizon Great Sun is expected to generate 3.76 times less return on investment than Lander Sports. In addition to that, Great Sun is 1.18 times more volatile than Lander Sports Development. It trades about 0.01 of its total potential returns per unit of risk. Lander Sports Development is currently generating about 0.02 per unit of volatility. If you would invest  283.00  in Lander Sports Development on October 31, 2024 and sell it today you would earn a total of  39.00  from holding Lander Sports Development or generate 13.78% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Great Sun Foods Co  vs.  Lander Sports Development

 Performance 
       Timeline  
Great Sun Foods 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Great Sun Foods Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in March 2025. The current disturbance may also be a sign of long term up-swing for the company investors.
Lander Sports Development 

Risk-Adjusted Performance

2 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Lander Sports Development are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Lander Sports may actually be approaching a critical reversion point that can send shares even higher in March 2025.

Great Sun and Lander Sports Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Great Sun and Lander Sports

The main advantage of trading using opposite Great Sun and Lander Sports positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Great Sun position performs unexpectedly, Lander Sports 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 Lander Sports will offset losses from the drop in Lander Sports' long position.
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The idea behind Great Sun Foods Co and Lander Sports Development pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.

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