Correlation Between Sunny Friend and BES Engineering
Can any of the company-specific risk be diversified away by investing in both Sunny Friend and BES Engineering 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 BES Engineering 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 BES Engineering Co, you can compare the effects of market volatilities on Sunny Friend and BES Engineering 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 BES Engineering. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunny Friend and BES Engineering.
Diversification Opportunities for Sunny Friend and BES Engineering
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sunny and BES is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Sunny Friend Environmental and BES Engineering Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BES Engineering 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 BES Engineering. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BES Engineering has no effect on the direction of Sunny Friend i.e., Sunny Friend and BES Engineering go up and down completely randomly.
Pair Corralation between Sunny Friend and BES Engineering
Assuming the 90 days trading horizon Sunny Friend Environmental is expected to under-perform the BES Engineering. In addition to that, Sunny Friend is 1.02 times more volatile than BES Engineering Co. It trades about -0.18 of its total potential returns per unit of risk. BES Engineering Co is currently generating about 0.02 per unit of volatility. If you would invest 1,110 in BES Engineering Co on August 27, 2024 and sell it today you would earn a total of 5.00 from holding BES Engineering Co or generate 0.45% 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. BES Engineering Co
Performance |
| Timeline |
| Sunny Friend Environ |
| BES Engineering |
Sunny Friend and BES Engineering Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sunny Friend and BES Engineering
The main advantage of trading using opposite Sunny Friend and BES Engineering positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunny Friend position performs unexpectedly, BES Engineering 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 BES Engineering will offset losses from the drop in BES Engineering'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 |
| BES Engineering vs. Sunny Friend Environmental | BES Engineering vs. TTET Union Corp | BES Engineering vs. ECOVE Environment Corp | BES Engineering 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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