Correlation Between Sunny Friend and Chainqui Construction
Can any of the company-specific risk be diversified away by investing in both Sunny Friend and Chainqui Construction 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 Chainqui Construction 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 Chainqui Construction Development, you can compare the effects of market volatilities on Sunny Friend and Chainqui Construction 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 Chainqui Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunny Friend and Chainqui Construction.
Diversification Opportunities for Sunny Friend and Chainqui Construction
-0.3 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sunny and Chainqui is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Sunny Friend Environmental and Chainqui Construction Developm in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chainqui Construction 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 Chainqui Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chainqui Construction has no effect on the direction of Sunny Friend i.e., Sunny Friend and Chainqui Construction go up and down completely randomly.
Pair Corralation between Sunny Friend and Chainqui Construction
Assuming the 90 days trading horizon Sunny Friend Environmental is expected to under-perform the Chainqui Construction. But the stock apears to be less risky and, when comparing its historical volatility, Sunny Friend Environmental is 1.18 times less risky than Chainqui Construction. The stock trades about -0.07 of its potential returns per unit of risk. The Chainqui Construction Development is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,455 in Chainqui Construction Development on August 28, 2024 and sell it today you would earn a total of 350.00 from holding Chainqui Construction Development or generate 24.05% 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. Chainqui Construction Developm
Performance |
| Timeline |
| Sunny Friend Environ |
| Chainqui Construction |
Sunny Friend and Chainqui Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sunny Friend and Chainqui Construction
The main advantage of trading using opposite Sunny Friend and Chainqui Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunny Friend position performs unexpectedly, Chainqui Construction 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 Chainqui Construction will offset losses from the drop in Chainqui Construction'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 |
| Chainqui Construction vs. Sunny Friend Environmental | Chainqui Construction vs. TTET Union Corp | Chainqui Construction vs. ECOVE Environment Corp | Chainqui Construction 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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