Correlation Between Entravision Communications and Sunny Optical
Can any of the company-specific risk be diversified away by investing in both Entravision Communications 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 Entravision Communications and Sunny Optical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Entravision Communications and Sunny Optical Technology, you can compare the effects of market volatilities on Entravision Communications 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 Entravision Communications with a short position of Sunny Optical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Entravision Communications and Sunny Optical.
Diversification Opportunities for Entravision Communications and Sunny Optical
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Entravision and Sunny is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Entravision Communications 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 Entravision Communications 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 Entravision Communications 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 Entravision Communications i.e., Entravision Communications and Sunny Optical go up and down completely randomly.
Pair Corralation between Entravision Communications and Sunny Optical
Assuming the 90 days horizon Entravision Communications is expected to under-perform the Sunny Optical. In addition to that, Entravision Communications is 1.15 times more volatile than Sunny Optical Technology. It trades about -0.02 of its total potential returns per unit of risk. Sunny Optical Technology is currently generating about 0.01 per unit of volatility. If you would invest 1,012 in Sunny Optical Technology on November 6, 2024 and sell it today you would lose (149.00) from holding Sunny Optical Technology or give up 14.72% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Entravision Communications vs. Sunny Optical Technology
Performance |
| Timeline |
| Entravision Communications |
| Sunny Optical Technology |
Entravision Communications and Sunny Optical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Entravision Communications and Sunny Optical
The main advantage of trading using opposite Entravision Communications and Sunny Optical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Entravision Communications 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.| Entravision Communications vs. Gladstone Investment | Entravision Communications vs. GLG LIFE TECH | Entravision Communications vs. Easy Software AG | Entravision Communications vs. New Residential Investment |
| Sunny Optical vs. Haier Smart Home | Sunny Optical vs. Hisense Home Appliances | Sunny Optical vs. Air Lease | Sunny Optical vs. OFFICE DEPOT |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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