Correlation Between Centaur Media and Sunny Optical
Can any of the company-specific risk be diversified away by investing in both Centaur Media 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 Centaur Media and Sunny Optical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Centaur Media and Sunny Optical Technology, you can compare the effects of market volatilities on Centaur Media 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 Centaur Media with a short position of Sunny Optical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Centaur Media and Sunny Optical.
Diversification Opportunities for Centaur Media and Sunny Optical
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Centaur and Sunny is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Centaur Media 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 Centaur Media 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 Centaur Media 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 Centaur Media i.e., Centaur Media and Sunny Optical go up and down completely randomly.
Pair Corralation between Centaur Media and Sunny Optical
Assuming the 90 days trading horizon Centaur Media is expected to under-perform the Sunny Optical. But the stock apears to be less risky and, when comparing its historical volatility, Centaur Media is 1.31 times less risky than Sunny Optical. The stock trades about -0.12 of its potential returns per unit of risk. The Sunny Optical Technology is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 4,925 in Sunny Optical Technology on September 21, 2024 and sell it today you would earn a total of 2,130 from holding Sunny Optical Technology or generate 43.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Centaur Media vs. Sunny Optical Technology
Performance |
| Timeline |
| Centaur Media |
| Sunny Optical Technology |
Centaur Media and Sunny Optical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Centaur Media and Sunny Optical
The main advantage of trading using opposite Centaur Media and Sunny Optical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Centaur Media 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.| Centaur Media vs. Quantum Blockchain Technologies | Centaur Media vs. Versarien PLC | Centaur Media vs. Argo Group Limited | Centaur Media vs. Tungsten West PLC |
| Sunny Optical vs. Wyndham Hotels Resorts | Sunny Optical vs. Advanced Medical Solutions | Sunny Optical vs. Intermediate Capital Group | Sunny Optical vs. Centaur Media |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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