Correlation Between Sunny Friend and Asia Electronic
Can any of the company-specific risk be diversified away by investing in both Sunny Friend and Asia Electronic 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 Asia Electronic 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 Asia Electronic Material, you can compare the effects of market volatilities on Sunny Friend and Asia Electronic 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 Asia Electronic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunny Friend and Asia Electronic.
Diversification Opportunities for Sunny Friend and Asia Electronic
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between Sunny and Asia is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Sunny Friend Environmental and Asia Electronic Material in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asia Electronic Material 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 Asia Electronic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asia Electronic Material has no effect on the direction of Sunny Friend i.e., Sunny Friend and Asia Electronic go up and down completely randomly.
Pair Corralation between Sunny Friend and Asia Electronic
Assuming the 90 days trading horizon Sunny Friend Environmental is expected to under-perform the Asia Electronic. But the stock apears to be less risky and, when comparing its historical volatility, Sunny Friend Environmental is 1.09 times less risky than Asia Electronic. The stock trades about -0.04 of its potential returns per unit of risk. The Asia Electronic Material is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 1,531 in Asia Electronic Material on August 30, 2024 and sell it today you would earn a total of 494.00 from holding Asia Electronic Material or generate 32.27% 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. Asia Electronic Material
Performance |
| Timeline |
| Sunny Friend Environ |
| Asia Electronic Material |
Sunny Friend and Asia Electronic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sunny Friend and Asia Electronic
The main advantage of trading using opposite Sunny Friend and Asia Electronic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunny Friend position performs unexpectedly, Asia Electronic 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 Asia Electronic will offset losses from the drop in Asia Electronic'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 |
| Asia Electronic vs. Mayer Steel Pipe | Asia Electronic vs. Sunny Friend Environmental | Asia Electronic vs. Golden Biotechnology | Asia Electronic vs. China Steel 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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