Correlation Between EXCELSIOR UNITED and SUN
Can any of the company-specific risk be diversified away by investing in both EXCELSIOR UNITED and SUN 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 EXCELSIOR UNITED and SUN into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EXCELSIOR UNITED DEVELOPMENT and SUN LIMITED, you can compare the effects of market volatilities on EXCELSIOR UNITED and SUN 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 EXCELSIOR UNITED with a short position of SUN. Check out your portfolio center. Please also check ongoing floating volatility patterns of EXCELSIOR UNITED and SUN.
Diversification Opportunities for EXCELSIOR UNITED and SUN
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between EXCELSIOR and SUN is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding EXCELSIOR UNITED DEVELOPMENT and SUN LIMITED in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SUN LIMITED and EXCELSIOR UNITED 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 EXCELSIOR UNITED DEVELOPMENT are associated (or correlated) with SUN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SUN LIMITED has no effect on the direction of EXCELSIOR UNITED i.e., EXCELSIOR UNITED and SUN go up and down completely randomly.
Pair Corralation between EXCELSIOR UNITED and SUN
Assuming the 90 days trading horizon EXCELSIOR UNITED DEVELOPMENT is expected to generate 0.24 times more return on investment than SUN. However, EXCELSIOR UNITED DEVELOPMENT is 4.09 times less risky than SUN. It trades about 0.05 of its potential returns per unit of risk. SUN LIMITED is currently generating about 0.0 per unit of risk. If you would invest 1,520 in EXCELSIOR UNITED DEVELOPMENT on September 2, 2024 and sell it today you would earn a total of 80.00 from holding EXCELSIOR UNITED DEVELOPMENT or generate 5.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
EXCELSIOR UNITED DEVELOPMENT vs. SUN LIMITED
Performance |
| Timeline |
| EXCELSIOR UNITED DEV |
| SUN LIMITED |
EXCELSIOR UNITED and SUN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EXCELSIOR UNITED and SUN
The main advantage of trading using opposite EXCELSIOR UNITED and SUN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EXCELSIOR UNITED position performs unexpectedly, SUN 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 will offset losses from the drop in SUN's long position.| EXCELSIOR UNITED vs. PHOENIX INVESTMENT PANY | EXCELSIOR UNITED vs. NATIONAL INVESTMENT TRUST | EXCELSIOR UNITED vs. PHOENIX BEVERAGES LTD | EXCELSIOR UNITED vs. BAYPORT MANAGEMENT LTD |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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