Correlation Between Diageo PLC and Sunny Optical
Can any of the company-specific risk be diversified away by investing in both Diageo PLC 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 Diageo PLC and Sunny Optical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Diageo PLC and Sunny Optical Technology, you can compare the effects of market volatilities on Diageo PLC 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 Diageo PLC with a short position of Sunny Optical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Diageo PLC and Sunny Optical.
Diversification Opportunities for Diageo PLC and Sunny Optical
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Diageo and Sunny is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Diageo PLC 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 Diageo PLC 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 Diageo PLC 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 Diageo PLC i.e., Diageo PLC and Sunny Optical go up and down completely randomly.
Pair Corralation between Diageo PLC and Sunny Optical
Assuming the 90 days trading horizon Diageo PLC is expected to under-perform the Sunny Optical. But the stock apears to be less risky and, when comparing its historical volatility, Diageo PLC is 2.82 times less risky than Sunny Optical. The stock trades about -0.05 of its potential returns per unit of risk. The Sunny Optical Technology is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 9,181 in Sunny Optical Technology on September 14, 2024 and sell it today you would lose (2,581) from holding Sunny Optical Technology or give up 28.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 88.76% |
| Values | Daily Returns |
Diageo PLC vs. Sunny Optical Technology
Performance |
| Timeline |
| Diageo PLC |
| Sunny Optical Technology |
Diageo PLC and Sunny Optical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Diageo PLC and Sunny Optical
The main advantage of trading using opposite Diageo PLC and Sunny Optical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Diageo PLC 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.| Diageo PLC vs. Sunny Optical Technology | Diageo PLC vs. SMA Solar Technology | Diageo PLC vs. DXC Technology Co | Diageo PLC vs. Bytes Technology |
| Sunny Optical vs. Amedeo Air Four | Sunny Optical vs. Odfjell Drilling | Sunny Optical vs. Aeorema Communications Plc | Sunny Optical vs. Wizz Air Holdings |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
Other Complementary Tools
| CEOs Directory Screen CEOs from public companies around the world | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Bonds Directory Find actively traded corporate debentures issued by US companies |