Correlation Between Nemetschek and Sunny Optical
Can any of the company-specific risk be diversified away by investing in both Nemetschek 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 Nemetschek and Sunny Optical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nemetschek AG ON and Sunny Optical Technology, you can compare the effects of market volatilities on Nemetschek 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 Nemetschek with a short position of Sunny Optical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nemetschek and Sunny Optical.
Diversification Opportunities for Nemetschek and Sunny Optical
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Nemetschek and Sunny is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Nemetschek AG ON 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 Nemetschek 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 Nemetschek AG ON 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 Nemetschek i.e., Nemetschek and Sunny Optical go up and down completely randomly.
Pair Corralation between Nemetschek and Sunny Optical
Assuming the 90 days trading horizon Nemetschek AG ON is expected to generate 0.59 times more return on investment than Sunny Optical. However, Nemetschek AG ON is 1.71 times less risky than Sunny Optical. It trades about 0.08 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 4,639 in Nemetschek AG ON on September 12, 2024 and sell it today you would earn a total of 5,186 from holding Nemetschek AG ON or generate 111.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nemetschek AG ON vs. Sunny Optical Technology
Performance |
| Timeline |
| Nemetschek AG ON |
| Sunny Optical Technology |
Nemetschek and Sunny Optical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nemetschek and Sunny Optical
The main advantage of trading using opposite Nemetschek and Sunny Optical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nemetschek 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.| Nemetschek vs. Salesforce | Nemetschek vs. Superior Plus Corp | Nemetschek vs. SIVERS SEMICONDUCTORS AB | Nemetschek vs. Norsk Hydro ASA |
| Sunny Optical vs. Hubbell Incorporated | Sunny Optical vs. TDK Corporation | Sunny Optical vs. Superior Plus Corp | Sunny Optical vs. SIVERS SEMICONDUCTORS AB |
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.
Other Complementary Tools
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| CEOs Directory Screen CEOs from public companies around the world |