Correlation Between Sunny Friend and Mirle Automation
Can any of the company-specific risk be diversified away by investing in both Sunny Friend and Mirle Automation 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 Mirle Automation 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 Mirle Automation Corp, you can compare the effects of market volatilities on Sunny Friend and Mirle Automation 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 Mirle Automation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunny Friend and Mirle Automation.
Diversification Opportunities for Sunny Friend and Mirle Automation
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Sunny and Mirle is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Sunny Friend Environmental and Mirle Automation Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mirle Automation 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 Mirle Automation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mirle Automation Corp has no effect on the direction of Sunny Friend i.e., Sunny Friend and Mirle Automation go up and down completely randomly.
Pair Corralation between Sunny Friend and Mirle Automation
Assuming the 90 days trading horizon Sunny Friend Environmental is expected to under-perform the Mirle Automation. But the stock apears to be less risky and, when comparing its historical volatility, Sunny Friend Environmental is 2.02 times less risky than Mirle Automation. The stock trades about -0.07 of its potential returns per unit of risk. The Mirle Automation Corp is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 3,825 in Mirle Automation Corp on August 26, 2024 and sell it today you would earn a total of 3,675 from holding Mirle Automation Corp or generate 96.08% 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. Mirle Automation Corp
Performance |
| Timeline |
| Sunny Friend Environ |
| Mirle Automation Corp |
Sunny Friend and Mirle Automation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sunny Friend and Mirle Automation
The main advantage of trading using opposite Sunny Friend and Mirle Automation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunny Friend position performs unexpectedly, Mirle Automation 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 Mirle Automation will offset losses from the drop in Mirle Automation's long position.| Sunny Friend vs. Cleanaway Co | Sunny Friend vs. Taiwan Secom Co | Sunny Friend vs. TTET Union Corp | Sunny Friend vs. Tehmag Foods |
| Mirle Automation vs. Sunny Friend Environmental | Mirle Automation vs. TTET Union Corp | Mirle Automation vs. ECOVE Environment Corp | Mirle Automation 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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