Correlation Between Sunshine Biopharma and China SXT
Can any of the company-specific risk be diversified away by investing in both Sunshine Biopharma and China SXT 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 Sunshine Biopharma and China SXT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sunshine Biopharma and China SXT Pharmaceuticals, you can compare the effects of market volatilities on Sunshine Biopharma and China SXT 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 Sunshine Biopharma with a short position of China SXT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunshine Biopharma and China SXT.
Diversification Opportunities for Sunshine Biopharma and China SXT
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sunshine and China is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Sunshine Biopharma and China SXT Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China SXT Pharmaceuticals and Sunshine Biopharma 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 Sunshine Biopharma are associated (or correlated) with China SXT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China SXT Pharmaceuticals has no effect on the direction of Sunshine Biopharma i.e., Sunshine Biopharma and China SXT go up and down completely randomly.
Pair Corralation between Sunshine Biopharma and China SXT
Given the investment horizon of 90 days Sunshine Biopharma is expected to generate 1.49 times more return on investment than China SXT. However, Sunshine Biopharma is 1.49 times more volatile than China SXT Pharmaceuticals. It trades about 0.04 of its potential returns per unit of risk. China SXT Pharmaceuticals is currently generating about -0.31 per unit of risk. If you would invest 282.00 in Sunshine Biopharma on September 1, 2024 and sell it today you would earn a total of 4.00 from holding Sunshine Biopharma or generate 1.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sunshine Biopharma vs. China SXT Pharmaceuticals
Performance |
| Timeline |
| Sunshine Biopharma |
| China SXT Pharmaceuticals |
Sunshine Biopharma and China SXT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sunshine Biopharma and China SXT
The main advantage of trading using opposite Sunshine Biopharma and China SXT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunshine Biopharma position performs unexpectedly, China SXT 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 China SXT will offset losses from the drop in China SXT's long position.| Sunshine Biopharma vs. Tff Pharmaceuticals | Sunshine Biopharma vs. Eliem Therapeutics | Sunshine Biopharma vs. Inhibrx | Sunshine Biopharma vs. Enliven Therapeutics |
| China SXT vs. Akanda Corp | China SXT vs. Petros Pharmaceuticals | China SXT vs. GelStat Corp | China SXT vs. Shuttle Pharmaceuticals |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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