Correlation Between Dohome Public and Sun Vending
Can any of the company-specific risk be diversified away by investing in both Dohome Public and Sun Vending 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 Dohome Public and Sun Vending into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dohome Public and Sun Vending Technology, you can compare the effects of market volatilities on Dohome Public and Sun Vending 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 Dohome Public with a short position of Sun Vending. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dohome Public and Sun Vending.
Diversification Opportunities for Dohome Public and Sun Vending
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Dohome and Sun is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Dohome Public and Sun Vending Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sun Vending Technology and Dohome Public 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 Dohome Public are associated (or correlated) with Sun Vending. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sun Vending Technology has no effect on the direction of Dohome Public i.e., Dohome Public and Sun Vending go up and down completely randomly.
Pair Corralation between Dohome Public and Sun Vending
Assuming the 90 days trading horizon Dohome Public is expected to under-perform the Sun Vending. But the stock apears to be less risky and, when comparing its historical volatility, Dohome Public is 1.25 times less risky than Sun Vending. The stock trades about -0.03 of its potential returns per unit of risk. The Sun Vending Technology is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 156.00 in Sun Vending Technology on September 3, 2024 and sell it today you would lose (5.00) from holding Sun Vending Technology or give up 3.21% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dohome Public vs. Sun Vending Technology
Performance |
| Timeline |
| Dohome Public |
| Sun Vending Technology |
Dohome Public and Sun Vending Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dohome Public and Sun Vending
The main advantage of trading using opposite Dohome Public and Sun Vending positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dohome Public position performs unexpectedly, Sun Vending 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 Sun Vending will offset losses from the drop in Sun Vending's long position.| Dohome Public vs. Com7 PCL | Dohome Public vs. Central Retail | Dohome Public vs. Siam Global House | Dohome Public vs. Home Product Center |
| Sun Vending vs. Hana Microelectronics Public | Sun Vending vs. Global Power Synergy | Sun Vending vs. Siam Global House | Sun Vending vs. Gulf Energy Development |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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