Correlation Between Launch Technologies and Sunny Friend
Can any of the company-specific risk be diversified away by investing in both Launch Technologies and Sunny Friend 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 Launch Technologies and Sunny Friend into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Launch Technologies Co and Sunny Friend Environmental, you can compare the effects of market volatilities on Launch Technologies and Sunny Friend 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 Launch Technologies with a short position of Sunny Friend. Check out your portfolio center. Please also check ongoing floating volatility patterns of Launch Technologies and Sunny Friend.
Diversification Opportunities for Launch Technologies and Sunny Friend
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Launch and Sunny is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Launch Technologies Co and Sunny Friend Environmental in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sunny Friend Environ and Launch Technologies 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 Launch Technologies Co are associated (or correlated) with Sunny Friend. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sunny Friend Environ has no effect on the direction of Launch Technologies i.e., Launch Technologies and Sunny Friend go up and down completely randomly.
Pair Corralation between Launch Technologies and Sunny Friend
Assuming the 90 days trading horizon Launch Technologies Co is expected to under-perform the Sunny Friend. In addition to that, Launch Technologies is 1.23 times more volatile than Sunny Friend Environmental. It trades about -0.1 of its total potential returns per unit of risk. Sunny Friend Environmental is currently generating about -0.08 per unit of volatility. If you would invest 15,950 in Sunny Friend Environmental on August 30, 2024 and sell it today you would lose (6,770) from holding Sunny Friend Environmental or give up 42.45% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Launch Technologies Co vs. Sunny Friend Environmental
Performance |
| Timeline |
| Launch Technologies |
| Sunny Friend Environ |
Launch Technologies and Sunny Friend Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Launch Technologies and Sunny Friend
The main advantage of trading using opposite Launch Technologies and Sunny Friend positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Launch Technologies position performs unexpectedly, Sunny Friend 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 Sunny Friend will offset losses from the drop in Sunny Friend's long position.| Launch Technologies vs. Univacco Technology | Launch Technologies vs. Integrated Service Technology | Launch Technologies vs. Microtips Technology | Launch Technologies vs. Arbor Technology |
| Sunny Friend vs. Cleanaway Co | Sunny Friend vs. Taiwan Secom Co | Sunny Friend vs. ECOVE Environment Corp | Sunny Friend vs. TTET Union 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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