Correlation Between Sunny Friend and Yageo Corp
Can any of the company-specific risk be diversified away by investing in both Sunny Friend and Yageo Corp 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 Yageo Corp 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 Yageo Corp, you can compare the effects of market volatilities on Sunny Friend and Yageo Corp 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 Yageo Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunny Friend and Yageo Corp.
Diversification Opportunities for Sunny Friend and Yageo Corp
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sunny and Yageo is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Sunny Friend Environmental and Yageo Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yageo Corp 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 Yageo Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yageo Corp has no effect on the direction of Sunny Friend i.e., Sunny Friend and Yageo Corp go up and down completely randomly.
Pair Corralation between Sunny Friend and Yageo Corp
Assuming the 90 days trading horizon Sunny Friend Environmental is expected to under-perform the Yageo Corp. But the stock apears to be less risky and, when comparing its historical volatility, Sunny Friend Environmental is 2.04 times less risky than Yageo Corp. The stock trades about -0.27 of its potential returns per unit of risk. The Yageo Corp is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 52,900 in Yageo Corp on October 25, 2024 and sell it today you would earn a total of 800.00 from holding Yageo Corp or generate 1.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sunny Friend Environmental vs. Yageo Corp
Performance |
| Timeline |
| Sunny Friend Environ |
| Yageo Corp |
Sunny Friend and Yageo Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sunny Friend and Yageo Corp
The main advantage of trading using opposite Sunny Friend and Yageo Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunny Friend position performs unexpectedly, Yageo Corp 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 Yageo Corp will offset losses from the drop in Yageo Corp'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 |
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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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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