Correlation Between GAZTRTECHNIUADR1/5EO01 and Sunny Optical
Can any of the company-specific risk be diversified away by investing in both GAZTRTECHNIUADR1/5EO01 and Sunny Optical 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 GAZTRTECHNIUADR1/5EO01 and Sunny Optical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GAZTRTECHNIUADR15EO01 and Sunny Optical Technology, you can compare the effects of market volatilities on GAZTRTECHNIUADR1/5EO01 and Sunny Optical 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 GAZTRTECHNIUADR1/5EO01 with a short position of Sunny Optical. Check out your portfolio center. Please also check ongoing floating volatility patterns of GAZTRTECHNIUADR1/5EO01 and Sunny Optical.
Diversification Opportunities for GAZTRTECHNIUADR1/5EO01 and Sunny Optical
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between GAZTRTECHNIUADR1/5EO01 and Sunny is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding GAZTRTECHNIUADR15EO01 and Sunny Optical Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sunny Optical Technology and GAZTRTECHNIUADR1/5EO01 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 GAZTRTECHNIUADR15EO01 are associated (or correlated) with Sunny Optical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sunny Optical Technology has no effect on the direction of GAZTRTECHNIUADR1/5EO01 i.e., GAZTRTECHNIUADR1/5EO01 and Sunny Optical go up and down completely randomly.
Pair Corralation between GAZTRTECHNIUADR1/5EO01 and Sunny Optical
Assuming the 90 days trading horizon GAZTRTECHNIUADR1/5EO01 is expected to generate 1.99 times less return on investment than Sunny Optical. But when comparing it to its historical volatility, GAZTRTECHNIUADR15EO01 is 2.07 times less risky than Sunny Optical. It trades about 0.09 of its potential returns per unit of risk. Sunny Optical Technology is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 821.00 in Sunny Optical Technology on November 6, 2024 and sell it today you would earn a total of 42.00 from holding Sunny Optical Technology or generate 5.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GAZTRTECHNIUADR15EO01 vs. Sunny Optical Technology
Performance |
| Timeline |
| GAZTRTECHNIUADR1/5EO01 |
| Sunny Optical Technology |
GAZTRTECHNIUADR1/5EO01 and Sunny Optical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GAZTRTECHNIUADR1/5EO01 and Sunny Optical
The main advantage of trading using opposite GAZTRTECHNIUADR1/5EO01 and Sunny Optical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GAZTRTECHNIUADR1/5EO01 position performs unexpectedly, Sunny Optical 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 Optical will offset losses from the drop in Sunny Optical's long position.| GAZTRTECHNIUADR1/5EO01 vs. Corsair Gaming | GAZTRTECHNIUADR1/5EO01 vs. Westinghouse Air Brake | GAZTRTECHNIUADR1/5EO01 vs. Zoom Video Communications | GAZTRTECHNIUADR1/5EO01 vs. Altair Engineering |
| Sunny Optical vs. Haier Smart Home | Sunny Optical vs. Hisense Home Appliances | Sunny Optical vs. Air Lease | Sunny Optical vs. OFFICE DEPOT |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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