Correlation Between Sunny Friend and Ta Ya
Can any of the company-specific risk be diversified away by investing in both Sunny Friend and Ta Ya 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 Sunny Friend and Ta Ya into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sunny Friend Environmental and Ta Ya Electric, you can compare the effects of market volatilities on Sunny Friend and Ta Ya 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 Sunny Friend with a short position of Ta Ya. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunny Friend and Ta Ya.
Diversification Opportunities for Sunny Friend and Ta Ya
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sunny and 1609 is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Sunny Friend Environmental and Ta Ya Electric in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ta Ya Electric and Sunny Friend 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 Sunny Friend Environmental are associated (or correlated) with Ta Ya. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ta Ya Electric has no effect on the direction of Sunny Friend i.e., Sunny Friend and Ta Ya go up and down completely randomly.
Pair Corralation between Sunny Friend and Ta Ya
Assuming the 90 days trading horizon Sunny Friend Environmental is expected to under-perform the Ta Ya. In addition to that, Sunny Friend is 1.3 times more volatile than Ta Ya Electric. It trades about -0.1 of its total potential returns per unit of risk. Ta Ya Electric is currently generating about 0.07 per unit of volatility. If you would invest 4,610 in Ta Ya Electric on August 29, 2024 and sell it today you would earn a total of 100.00 from holding Ta Ya Electric or generate 2.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sunny Friend Environmental vs. Ta Ya Electric
Performance |
| Timeline |
| Sunny Friend Environ |
| Ta Ya Electric |
Sunny Friend and Ta Ya Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sunny Friend and Ta Ya
The main advantage of trading using opposite Sunny Friend and Ta Ya positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunny Friend position performs unexpectedly, Ta Ya 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 Ta Ya will offset losses from the drop in Ta Ya's long position.| Sunny Friend vs. Cleanaway Co | Sunny Friend vs. Taiwan Secom Co | Sunny Friend vs. ECOVE Environment Corp | Sunny Friend vs. TTET Union Corp |
| Ta Ya vs. Yulon Motor Co | Ta Ya vs. Far Eastern Department | Ta Ya vs. China Steel Corp | Ta Ya vs. Chang Hwa Commercial |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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