Correlation Between Power Wind and Sunny Friend
Can any of the company-specific risk be diversified away by investing in both Power Wind 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 Power Wind and Sunny Friend into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Power Wind Health and Sunny Friend Environmental, you can compare the effects of market volatilities on Power Wind 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 Power Wind with a short position of Sunny Friend. Check out your portfolio center. Please also check ongoing floating volatility patterns of Power Wind and Sunny Friend.
Diversification Opportunities for Power Wind and Sunny Friend
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Power and Sunny is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Power Wind Health 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 Power Wind 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 Power Wind Health 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 Power Wind i.e., Power Wind and Sunny Friend go up and down completely randomly.
Pair Corralation between Power Wind and Sunny Friend
Assuming the 90 days trading horizon Power Wind Health is expected to generate 0.98 times more return on investment than Sunny Friend. However, Power Wind Health is 1.02 times less risky than Sunny Friend. It trades about 0.0 of its potential returns per unit of risk. Sunny Friend Environmental is currently generating about -0.04 per unit of risk. If you would invest 12,058 in Power Wind Health on August 26, 2024 and sell it today you would lose (608.00) from holding Power Wind Health or give up 5.04% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Power Wind Health vs. Sunny Friend Environmental
Performance |
| Timeline |
| Power Wind Health |
| Sunny Friend Environ |
Power Wind and Sunny Friend Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Power Wind and Sunny Friend
The main advantage of trading using opposite Power Wind and Sunny Friend positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Power Wind 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.| Power Wind vs. Sunny Friend Environmental | Power Wind vs. Cleanaway Co | Power Wind vs. Charoen Pokphand Enterprise | Power Wind vs. TTET Union Corp |
| Sunny Friend vs. Cleanaway Co | Sunny Friend vs. Taiwan Secom Co | Sunny Friend vs. TTET Union Corp | Sunny Friend vs. Tehmag Foods |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
Other Complementary Tools
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments |