Correlation Between Sunny Friend and U Ming
Can any of the company-specific risk be diversified away by investing in both Sunny Friend and U Ming 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 U Ming 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 U Ming Marine Transport, you can compare the effects of market volatilities on Sunny Friend and U Ming 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 U Ming. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunny Friend and U Ming.
Diversification Opportunities for Sunny Friend and U Ming
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Sunny and 2606 is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Sunny Friend Environmental and U Ming Marine Transport in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on U Ming Marine 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 U Ming. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of U Ming Marine has no effect on the direction of Sunny Friend i.e., Sunny Friend and U Ming go up and down completely randomly.
Pair Corralation between Sunny Friend and U Ming
Assuming the 90 days trading horizon Sunny Friend Environmental is expected to under-perform the U Ming. But the stock apears to be less risky and, when comparing its historical volatility, Sunny Friend Environmental is 1.46 times less risky than U Ming. The stock trades about -0.07 of its potential returns per unit of risk. The U Ming Marine Transport is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 4,350 in U Ming Marine Transport on August 26, 2024 and sell it today you would earn a total of 1,750 from holding U Ming Marine Transport or generate 40.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sunny Friend Environmental vs. U Ming Marine Transport
Performance |
| Timeline |
| Sunny Friend Environ |
| U Ming Marine |
Sunny Friend and U Ming Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sunny Friend and U Ming
The main advantage of trading using opposite Sunny Friend and U Ming positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunny Friend position performs unexpectedly, U Ming 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 U Ming will offset losses from the drop in U Ming'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 |
| U Ming vs. Sunny Friend Environmental | U Ming vs. TTET Union Corp | U Ming vs. ECOVE Environment Corp | U Ming 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
Other Complementary Tools
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities |