Correlation Between Great Sun and Bus Online

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Can any of the company-specific risk be diversified away by investing in both Great Sun and Bus Online 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 Bus Online 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 Bus Online Co, you can compare the effects of market volatilities on Great Sun and Bus Online 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 Bus Online. Check out your portfolio center. Please also check ongoing floating volatility patterns of Great Sun and Bus Online.

Diversification Opportunities for Great Sun and Bus Online

0.8
  Correlation Coefficient

Very poor diversification

The 3 months correlation between Great and Bus is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Great Sun Foods Co and Bus Online Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bus Online 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 Bus Online. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bus Online has no effect on the direction of Great Sun i.e., Great Sun and Bus Online go up and down completely randomly.

Pair Corralation between Great Sun and Bus Online

Assuming the 90 days trading horizon Great Sun Foods Co is expected to generate 1.11 times more return on investment than Bus Online. However, Great Sun is 1.11 times more volatile than Bus Online Co. It trades about 0.01 of its potential returns per unit of risk. Bus Online Co is currently generating about -0.03 per unit of risk. If you would invest  493.00  in Great Sun Foods Co on October 16, 2024 and sell it today you would lose (45.00) from holding Great Sun Foods Co or give up 9.13% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy100.0%
ValuesDaily Returns

Great Sun Foods Co  vs.  Bus Online Co

 Performance 
       Timeline  
Great Sun Foods 

Risk-Adjusted Performance

5 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in Great Sun Foods Co are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Great Sun sustained solid returns over the last few months and may actually be approaching a breakup point.
Bus Online 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Bus Online Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Great Sun and Bus Online Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Great Sun and Bus Online

The main advantage of trading using opposite Great Sun and Bus Online positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Great Sun position performs unexpectedly, Bus Online 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 Bus Online will offset losses from the drop in Bus Online's long position.
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The idea behind Great Sun Foods Co and Bus Online Co 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.

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