Correlation Between Sunrise New and Acuity Brands
Can any of the company-specific risk be diversified away by investing in both Sunrise New and Acuity Brands 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 Sunrise New and Acuity Brands into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sunrise New Energy and Acuity Brands, you can compare the effects of market volatilities on Sunrise New and Acuity Brands 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 Sunrise New with a short position of Acuity Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunrise New and Acuity Brands.
Diversification Opportunities for Sunrise New and Acuity Brands
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Sunrise and Acuity is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Sunrise New Energy and Acuity Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acuity Brands and Sunrise New 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 Sunrise New Energy are associated (or correlated) with Acuity Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Acuity Brands has no effect on the direction of Sunrise New i.e., Sunrise New and Acuity Brands go up and down completely randomly.
Pair Corralation between Sunrise New and Acuity Brands
Given the investment horizon of 90 days Sunrise New Energy is expected to generate 2.43 times more return on investment than Acuity Brands. However, Sunrise New is 2.43 times more volatile than Acuity Brands. It trades about 0.21 of its potential returns per unit of risk. Acuity Brands is currently generating about 0.0 per unit of risk. If you would invest 86.00 in Sunrise New Energy on November 18, 2024 and sell it today you would earn a total of 14.00 from holding Sunrise New Energy or generate 16.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sunrise New Energy vs. Acuity Brands
Performance |
| Timeline |
| Sunrise New Energy |
| Acuity Brands |
Sunrise New and Acuity Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sunrise New and Acuity Brands
The main advantage of trading using opposite Sunrise New and Acuity Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunrise New position performs unexpectedly, Acuity Brands 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 Acuity Brands will offset losses from the drop in Acuity Brands' long position.| Sunrise New vs. Espey Mfg Electronics | Sunrise New vs. NeoVolta Warrant | Sunrise New vs. Kimball Electronics | Sunrise New vs. Hayward Holdings |
| Acuity Brands vs. Energizer Holdings | Acuity Brands vs. Espey Mfg Electronics | Acuity Brands vs. Preformed Line Products | Acuity Brands vs. nVent Electric PLC |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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