Correlation Between VITEC SOFTWARE and Sunny Optical
Can any of the company-specific risk be diversified away by investing in both VITEC SOFTWARE and Sunny Optical 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 VITEC SOFTWARE and Sunny Optical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VITEC SOFTWARE GROUP and Sunny Optical Technology, you can compare the effects of market volatilities on VITEC SOFTWARE and Sunny Optical 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 VITEC SOFTWARE with a short position of Sunny Optical. Check out your portfolio center. Please also check ongoing floating volatility patterns of VITEC SOFTWARE and Sunny Optical.
Diversification Opportunities for VITEC SOFTWARE and Sunny Optical
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between VITEC and Sunny is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding VITEC SOFTWARE GROUP and Sunny Optical Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sunny Optical Technology and VITEC SOFTWARE 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 VITEC SOFTWARE GROUP are associated (or correlated) with Sunny Optical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sunny Optical Technology has no effect on the direction of VITEC SOFTWARE i.e., VITEC SOFTWARE and Sunny Optical go up and down completely randomly.
Pair Corralation between VITEC SOFTWARE and Sunny Optical
Assuming the 90 days horizon VITEC SOFTWARE GROUP is expected to generate 0.61 times more return on investment than Sunny Optical. However, VITEC SOFTWARE GROUP is 1.63 times less risky than Sunny Optical. It trades about 0.03 of its potential returns per unit of risk. Sunny Optical Technology is currently generating about 0.01 per unit of risk. If you would invest 3,832 in VITEC SOFTWARE GROUP on October 30, 2024 and sell it today you would earn a total of 1,000.00 from holding VITEC SOFTWARE GROUP or generate 26.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
VITEC SOFTWARE GROUP vs. Sunny Optical Technology
Performance |
| Timeline |
| VITEC SOFTWARE GROUP |
| Sunny Optical Technology |
VITEC SOFTWARE and Sunny Optical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VITEC SOFTWARE and Sunny Optical
The main advantage of trading using opposite VITEC SOFTWARE and Sunny Optical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VITEC SOFTWARE position performs unexpectedly, Sunny Optical 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 Sunny Optical will offset losses from the drop in Sunny Optical's long position.| VITEC SOFTWARE vs. Inspire Medical Systems | VITEC SOFTWARE vs. SCANDMEDICAL SOLDK 040 | VITEC SOFTWARE vs. PEPTONIC MEDICAL | VITEC SOFTWARE vs. IMAGIN MEDICAL INC |
| Sunny Optical vs. Diamyd Medical AB | Sunny Optical vs. Merit Medical Systems | Sunny Optical vs. Firan Technology Group | Sunny Optical vs. Amkor Technology |
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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