Correlation Between Sunny Optical and FIT Hon
Can any of the company-specific risk be diversified away by investing in both Sunny Optical and FIT Hon 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 Sunny Optical and FIT Hon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sunny Optical Technology and FIT Hon Teng, you can compare the effects of market volatilities on Sunny Optical and FIT Hon 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 Sunny Optical with a short position of FIT Hon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunny Optical and FIT Hon.
Diversification Opportunities for Sunny Optical and FIT Hon
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sunny and FIT is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Sunny Optical Technology and FIT Hon Teng in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FIT Hon Teng and Sunny Optical 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 Sunny Optical Technology are associated (or correlated) with FIT Hon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FIT Hon Teng has no effect on the direction of Sunny Optical i.e., Sunny Optical and FIT Hon go up and down completely randomly.
Pair Corralation between Sunny Optical and FIT Hon
Assuming the 90 days horizon Sunny Optical Technology is expected to under-perform the FIT Hon. But the pink sheet apears to be less risky and, when comparing its historical volatility, Sunny Optical Technology is 2.69 times less risky than FIT Hon. The pink sheet trades about -0.01 of its potential returns per unit of risk. The FIT Hon Teng is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 25.00 in FIT Hon Teng on August 31, 2024 and sell it today you would earn a total of 15.00 from holding FIT Hon Teng or generate 60.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sunny Optical Technology vs. FIT Hon Teng
Performance |
| Timeline |
| Sunny Optical Technology |
| FIT Hon Teng |
Sunny Optical and FIT Hon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sunny Optical and FIT Hon
The main advantage of trading using opposite Sunny Optical and FIT Hon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunny Optical position performs unexpectedly, FIT Hon 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 FIT Hon will offset losses from the drop in FIT Hon's long position.| Sunny Optical vs. Fabrinet | Sunny Optical vs. Flex | Sunny Optical vs. Sanmina | Sunny Optical vs. Plexus Corp |
| FIT Hon vs. KULR Technology Group | FIT Hon vs. Ouster Inc | FIT Hon vs. MicroCloud Hologram | FIT Hon vs. Kopin |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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