Correlation Between Renesas Electronics and Sunny Optical
Can any of the company-specific risk be diversified away by investing in both Renesas Electronics 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 Renesas Electronics and Sunny Optical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Renesas Electronics and Sunny Optical Technology, you can compare the effects of market volatilities on Renesas Electronics 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 Renesas Electronics with a short position of Sunny Optical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Renesas Electronics and Sunny Optical.
Diversification Opportunities for Renesas Electronics and Sunny Optical
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Renesas and Sunny is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Renesas Electronics 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 Renesas Electronics 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 Renesas Electronics 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 Renesas Electronics i.e., Renesas Electronics and Sunny Optical go up and down completely randomly.
Pair Corralation between Renesas Electronics and Sunny Optical
Assuming the 90 days horizon Renesas Electronics is expected to under-perform the Sunny Optical. But the stock apears to be less risky and, when comparing its historical volatility, Renesas Electronics is 1.22 times less risky than Sunny Optical. The stock trades about 0.0 of its potential returns per unit of risk. The Sunny Optical Technology is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 578.00 in Sunny Optical Technology on October 17, 2024 and sell it today you would earn a total of 182.00 from holding Sunny Optical Technology or generate 31.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 98.33% |
| Values | Daily Returns |
Renesas Electronics vs. Sunny Optical Technology
Performance |
| Timeline |
| Renesas Electronics |
| Sunny Optical Technology |
Renesas Electronics and Sunny Optical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Renesas Electronics and Sunny Optical
The main advantage of trading using opposite Renesas Electronics and Sunny Optical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Renesas Electronics 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.| Renesas Electronics vs. ALERION CLEANPOWER | Renesas Electronics vs. CLEAN ENERGY FUELS | Renesas Electronics vs. Cleanaway Waste Management | Renesas Electronics vs. URBAN OUTFITTERS |
| Sunny Optical vs. Renesas Electronics | Sunny Optical vs. SPARTAN STORES | Sunny Optical vs. Samsung Electronics Co | Sunny Optical vs. IMPERIAL TOBACCO |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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