Correlation Between EHEALTH and Sunny Optical
Can any of the company-specific risk be diversified away by investing in both EHEALTH 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 EHEALTH and Sunny Optical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EHEALTH and Sunny Optical Technology, you can compare the effects of market volatilities on EHEALTH 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 EHEALTH with a short position of Sunny Optical. Check out your portfolio center. Please also check ongoing floating volatility patterns of EHEALTH and Sunny Optical.
Diversification Opportunities for EHEALTH and Sunny Optical
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between EHEALTH and Sunny is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding EHEALTH 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 EHEALTH 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 EHEALTH 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 EHEALTH i.e., EHEALTH and Sunny Optical go up and down completely randomly.
Pair Corralation between EHEALTH and Sunny Optical
Assuming the 90 days trading horizon EHEALTH is expected to under-perform the Sunny Optical. In addition to that, EHEALTH is 1.14 times more volatile than Sunny Optical Technology. It trades about -0.01 of its total potential returns per unit of risk. Sunny Optical Technology is currently generating about 0.02 per unit of volatility. If you would invest 761.00 in Sunny Optical Technology on September 4, 2024 and sell it today you would lose (8.00) from holding Sunny Optical Technology or give up 1.05% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.6% |
| Values | Daily Returns |
EHEALTH vs. Sunny Optical Technology
Performance |
| Timeline |
| EHEALTH |
| Sunny Optical Technology |
EHEALTH and Sunny Optical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EHEALTH and Sunny Optical
The main advantage of trading using opposite EHEALTH and Sunny Optical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EHEALTH 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 EHEALTH 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. Hon Hai Precision | Sunny Optical vs. Samsung SDI Co | Sunny Optical vs. Murata Manufacturing Co | Sunny Optical vs. Mitsubishi Electric |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
Other Complementary Tools
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk |