Correlation Between Sunfar Computer and China Metal
Can any of the company-specific risk be diversified away by investing in both Sunfar Computer and China Metal 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 Sunfar Computer and China Metal into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sunfar Computer Co and China Metal Products, you can compare the effects of market volatilities on Sunfar Computer and China Metal 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 Sunfar Computer with a short position of China Metal. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunfar Computer and China Metal.
Diversification Opportunities for Sunfar Computer and China Metal
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Sunfar and China is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Sunfar Computer Co and China Metal Products in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Metal Products and Sunfar Computer 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 Sunfar Computer Co are associated (or correlated) with China Metal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Metal Products has no effect on the direction of Sunfar Computer i.e., Sunfar Computer and China Metal go up and down completely randomly.
Pair Corralation between Sunfar Computer and China Metal
Assuming the 90 days trading horizon Sunfar Computer Co is expected to under-perform the China Metal. But the stock apears to be less risky and, when comparing its historical volatility, Sunfar Computer Co is 2.35 times less risky than China Metal. The stock trades about -0.02 of its potential returns per unit of risk. The China Metal Products is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 3,675 in China Metal Products on September 4, 2024 and sell it today you would lose (315.00) from holding China Metal Products or give up 8.57% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sunfar Computer Co vs. China Metal Products
Performance |
| Timeline |
| Sunfar Computer |
| China Metal Products |
Sunfar Computer and China Metal Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sunfar Computer and China Metal
The main advantage of trading using opposite Sunfar Computer and China Metal positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunfar Computer position performs unexpectedly, China Metal 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 China Metal will offset losses from the drop in China Metal's long position.| Sunfar Computer vs. Space Shuttle Hi Tech | Sunfar Computer vs. Ruentex Development Co | Sunfar Computer vs. Symtek Automation Asia | Sunfar Computer vs. CTCI Corp |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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