Correlation Between International Consolidated and Sunny Optical
Can any of the company-specific risk be diversified away by investing in both International Consolidated 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 International Consolidated and Sunny Optical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between International Consolidated Airlines and Sunny Optical Technology, you can compare the effects of market volatilities on International Consolidated 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 International Consolidated with a short position of Sunny Optical. Check out your portfolio center. Please also check ongoing floating volatility patterns of International Consolidated and Sunny Optical.
Diversification Opportunities for International Consolidated and Sunny Optical
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between International and Sunny is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding International Consolidated Air 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 International Consolidated 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 International Consolidated Airlines 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 International Consolidated i.e., International Consolidated and Sunny Optical go up and down completely randomly.
Pair Corralation between International Consolidated and Sunny Optical
Assuming the 90 days horizon International Consolidated Airlines is expected to generate 0.52 times more return on investment than Sunny Optical. However, International Consolidated Airlines is 1.93 times less risky than Sunny Optical. It trades about 0.12 of its potential returns per unit of risk. Sunny Optical Technology is currently generating about 0.01 per unit of risk. If you would invest 161.00 in International Consolidated Airlines on August 25, 2024 and sell it today you would earn a total of 133.00 from holding International Consolidated Airlines or generate 82.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
International Consolidated Air vs. Sunny Optical Technology
Performance |
| Timeline |
| International Consolidated |
| Sunny Optical Technology |
International Consolidated and Sunny Optical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with International Consolidated and Sunny Optical
The main advantage of trading using opposite International Consolidated and Sunny Optical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if International Consolidated 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.| International Consolidated vs. Coeur Mining | International Consolidated vs. Mitsubishi Gas Chemical | International Consolidated vs. Quaker Chemical | International Consolidated vs. Calibre Mining Corp |
| Sunny Optical vs. Amphenol | Sunny Optical vs. Hon Hai Precision | Sunny Optical vs. Samsung SDI Co | Sunny Optical vs. Corning Incorporated |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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