Correlation Between Sunny Optical and LGL
Can any of the company-specific risk be diversified away by investing in both Sunny Optical and LGL 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 LGL 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 LGL Group, you can compare the effects of market volatilities on Sunny Optical and LGL 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 LGL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunny Optical and LGL.
Diversification Opportunities for Sunny Optical and LGL
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Sunny and LGL is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Sunny Optical Technology and LGL Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LGL Group 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 LGL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LGL Group has no effect on the direction of Sunny Optical i.e., Sunny Optical and LGL go up and down completely randomly.
Pair Corralation between Sunny Optical and LGL
Assuming the 90 days horizon Sunny Optical Technology is expected to generate 1.91 times more return on investment than LGL. However, Sunny Optical is 1.91 times more volatile than LGL Group. It trades about 0.22 of its potential returns per unit of risk. LGL Group is currently generating about 0.03 per unit of risk. If you would invest 6,486 in Sunny Optical Technology on August 31, 2024 and sell it today you would earn a total of 1,287 from holding Sunny Optical Technology or generate 19.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sunny Optical Technology vs. LGL Group
Performance |
| Timeline |
| Sunny Optical Technology |
| LGL Group |
Sunny Optical and LGL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sunny Optical and LGL
The main advantage of trading using opposite Sunny Optical and LGL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunny Optical position performs unexpectedly, LGL 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 LGL will offset losses from the drop in LGL's long position.| Sunny Optical vs. Fabrinet | Sunny Optical vs. Flex | Sunny Optical vs. Sanmina | Sunny Optical vs. Plexus Corp |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
Other Complementary Tools
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| 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 | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope |