Correlation Between GreenX Metals and Sunny Optical
Can any of the company-specific risk be diversified away by investing in both GreenX Metals 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 GreenX Metals and Sunny Optical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GreenX Metals and Sunny Optical Technology, you can compare the effects of market volatilities on GreenX Metals 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 GreenX Metals with a short position of Sunny Optical. Check out your portfolio center. Please also check ongoing floating volatility patterns of GreenX Metals and Sunny Optical.
Diversification Opportunities for GreenX Metals and Sunny Optical
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between GreenX and Sunny is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding GreenX Metals 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 GreenX Metals 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 GreenX Metals 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 GreenX Metals i.e., GreenX Metals and Sunny Optical go up and down completely randomly.
Pair Corralation between GreenX Metals and Sunny Optical
Assuming the 90 days trading horizon GreenX Metals is expected to under-perform the Sunny Optical. But the stock apears to be less risky and, when comparing its historical volatility, GreenX Metals is 1.1 times less risky than Sunny Optical. The stock trades about -0.03 of its potential returns per unit of risk. The Sunny Optical Technology is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 3,816 in Sunny Optical Technology on September 3, 2024 and sell it today you would earn a total of 2,494 from holding Sunny Optical Technology or generate 65.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.81% |
| Values | Daily Returns |
GreenX Metals vs. Sunny Optical Technology
Performance |
| Timeline |
| GreenX Metals |
| Sunny Optical Technology |
GreenX Metals and Sunny Optical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GreenX Metals and Sunny Optical
The main advantage of trading using opposite GreenX Metals and Sunny Optical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GreenX Metals 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.The idea behind GreenX Metals and Sunny Optical Technology pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| Sunny Optical vs. Catalyst Media Group | Sunny Optical vs. CATLIN GROUP | Sunny Optical vs. Magnora ASA | Sunny Optical vs. RTW Venture Fund |
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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