Correlation Between Progate and Sunonwealth Electric
Can any of the company-specific risk be diversified away by investing in both Progate and Sunonwealth Electric 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 Progate and Sunonwealth Electric into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Progate Group and Sunonwealth Electric Machine, you can compare the effects of market volatilities on Progate and Sunonwealth Electric 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 Progate with a short position of Sunonwealth Electric. Check out your portfolio center. Please also check ongoing floating volatility patterns of Progate and Sunonwealth Electric.
Diversification Opportunities for Progate and Sunonwealth Electric
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Progate and Sunonwealth is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Progate Group and Sunonwealth Electric Machine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sunonwealth Electric and Progate 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 Progate Group are associated (or correlated) with Sunonwealth Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sunonwealth Electric has no effect on the direction of Progate i.e., Progate and Sunonwealth Electric go up and down completely randomly.
Pair Corralation between Progate and Sunonwealth Electric
Assuming the 90 days trading horizon Progate is expected to generate 5.05 times less return on investment than Sunonwealth Electric. In addition to that, Progate is 1.13 times more volatile than Sunonwealth Electric Machine. It trades about 0.01 of its total potential returns per unit of risk. Sunonwealth Electric Machine is currently generating about 0.06 per unit of volatility. If you would invest 6,160 in Sunonwealth Electric Machine on August 27, 2024 and sell it today you would earn a total of 4,340 from holding Sunonwealth Electric Machine or generate 70.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Progate Group vs. Sunonwealth Electric Machine
Performance |
| Timeline |
| Progate Group |
| Sunonwealth Electric |
Progate and Sunonwealth Electric Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Progate and Sunonwealth Electric
The main advantage of trading using opposite Progate and Sunonwealth Electric positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Progate position performs unexpectedly, Sunonwealth Electric 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 Sunonwealth Electric will offset losses from the drop in Sunonwealth Electric's long position.| Progate vs. Taiwan Semiconductor Manufacturing | Progate vs. Hon Hai Precision | Progate vs. MediaTek | Progate vs. Chunghwa Telecom Co |
| Sunonwealth Electric vs. Sunny Friend Environmental | Sunonwealth Electric vs. TTET Union Corp | Sunonwealth Electric vs. ECOVE Environment Corp | Sunonwealth Electric vs. Yulon Finance 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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