Correlation Between Sunrise New and Preformed Line
Can any of the company-specific risk be diversified away by investing in both Sunrise New and Preformed Line 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 Preformed Line 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 Preformed Line Products, you can compare the effects of market volatilities on Sunrise New and Preformed Line 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 Preformed Line. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunrise New and Preformed Line.
Diversification Opportunities for Sunrise New and Preformed Line
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Sunrise and Preformed is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Sunrise New Energy and Preformed Line Products in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Preformed Line Products 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 Preformed Line. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Preformed Line Products has no effect on the direction of Sunrise New i.e., Sunrise New and Preformed Line go up and down completely randomly.
Pair Corralation between Sunrise New and Preformed Line
Given the investment horizon of 90 days Sunrise New Energy is expected to under-perform the Preformed Line. In addition to that, Sunrise New is 1.72 times more volatile than Preformed Line Products. It trades about -0.04 of its total potential returns per unit of risk. Preformed Line Products is currently generating about 0.04 per unit of volatility. If you would invest 8,955 in Preformed Line Products on August 24, 2024 and sell it today you would earn a total of 4,897 from holding Preformed Line Products or generate 54.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sunrise New Energy vs. Preformed Line Products
Performance |
| Timeline |
| Sunrise New Energy |
| Preformed Line Products |
Sunrise New and Preformed Line Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sunrise New and Preformed Line
The main advantage of trading using opposite Sunrise New and Preformed Line positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunrise New position performs unexpectedly, Preformed Line 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 Preformed Line will offset losses from the drop in Preformed Line's long position.| Sunrise New vs. Espey Mfg Electronics | Sunrise New vs. NeoVolta Warrant | Sunrise New vs. Kimball Electronics | Sunrise New vs. Hayward Holdings |
| Preformed Line vs. Kimball Electronics | Preformed Line vs. nVent Electric PLC | Preformed Line vs. Espey Mfg Electronics | Preformed Line vs. Hubbell |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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