Correlation Between Apax Global and Sunny Optical
Can any of the company-specific risk be diversified away by investing in both Apax Global 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 Apax Global and Sunny Optical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apax Global Alpha and Sunny Optical Technology, you can compare the effects of market volatilities on Apax Global 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 Apax Global with a short position of Sunny Optical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apax Global and Sunny Optical.
Diversification Opportunities for Apax Global and Sunny Optical
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Apax and Sunny is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Apax Global Alpha 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 Apax Global 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 Apax Global Alpha 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 Apax Global i.e., Apax Global and Sunny Optical go up and down completely randomly.
Pair Corralation between Apax Global and Sunny Optical
Assuming the 90 days trading horizon Apax Global Alpha is expected to under-perform the Sunny Optical. But the stock apears to be less risky and, when comparing its historical volatility, Apax Global Alpha is 2.53 times less risky than Sunny Optical. The stock trades about -0.02 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 6,761 in Sunny Optical Technology on September 12, 2024 and sell it today you would lose (241.00) from holding Sunny Optical Technology or give up 3.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 93.82% |
| Values | Daily Returns |
Apax Global Alpha vs. Sunny Optical Technology
Performance |
| Timeline |
| Apax Global Alpha |
| Sunny Optical Technology |
Apax Global and Sunny Optical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apax Global and Sunny Optical
The main advantage of trading using opposite Apax Global and Sunny Optical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apax Global 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.| Apax Global vs. Sunny Optical Technology | Apax Global vs. Coeur Mining | Apax Global vs. Playtech Plc | Apax Global vs. L3Harris Technologies |
| Sunny Optical vs. Hong Kong Land | Sunny Optical vs. Neometals | Sunny Optical vs. Coor Service Management | Sunny Optical vs. Fidelity Sustainable USD |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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