Correlation Between EPSILON HEALTHCARE and Sunny Optical
Can any of the company-specific risk be diversified away by investing in both EPSILON HEALTHCARE 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 EPSILON HEALTHCARE and Sunny Optical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EPSILON HEALTHCARE LTD and Sunny Optical Technology, you can compare the effects of market volatilities on EPSILON HEALTHCARE 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 EPSILON HEALTHCARE with a short position of Sunny Optical. Check out your portfolio center. Please also check ongoing floating volatility patterns of EPSILON HEALTHCARE and Sunny Optical.
Diversification Opportunities for EPSILON HEALTHCARE and Sunny Optical
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between EPSILON and Sunny is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding EPSILON HEALTHCARE LTD 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 EPSILON HEALTHCARE 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 EPSILON HEALTHCARE LTD 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 EPSILON HEALTHCARE i.e., EPSILON HEALTHCARE and Sunny Optical go up and down completely randomly.
Pair Corralation between EPSILON HEALTHCARE and Sunny Optical
Assuming the 90 days trading horizon EPSILON HEALTHCARE LTD is expected to under-perform the Sunny Optical. But the stock apears to be less risky and, when comparing its historical volatility, EPSILON HEALTHCARE LTD is 3.05 times less risky than Sunny Optical. The stock trades about -0.03 of its potential returns per unit of risk. The Sunny Optical Technology is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 761.00 in Sunny Optical Technology on September 4, 2024 and sell it today you would lose (8.00) from holding Sunny Optical Technology or give up 1.05% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
EPSILON HEALTHCARE LTD vs. Sunny Optical Technology
Performance |
| Timeline |
| EPSILON HEALTHCARE LTD |
| Sunny Optical Technology |
EPSILON HEALTHCARE and Sunny Optical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EPSILON HEALTHCARE and Sunny Optical
The main advantage of trading using opposite EPSILON HEALTHCARE and Sunny Optical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EPSILON HEALTHCARE 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.| EPSILON HEALTHCARE vs. Takeda Pharmaceutical | EPSILON HEALTHCARE vs. Elanco Animal Health | EPSILON HEALTHCARE vs. Superior Plus Corp | EPSILON HEALTHCARE vs. Origin Agritech |
| Sunny Optical vs. Hon Hai Precision | Sunny Optical vs. Samsung SDI Co | Sunny Optical vs. Murata Manufacturing Co | Sunny Optical vs. Mitsubishi Electric |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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