Correlation Between Sunny Optical and LightPath Technologies
Can any of the company-specific risk be diversified away by investing in both Sunny Optical and LightPath Technologies 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 LightPath Technologies 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 LightPath Technologies, you can compare the effects of market volatilities on Sunny Optical and LightPath Technologies 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 LightPath Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunny Optical and LightPath Technologies.
Diversification Opportunities for Sunny Optical and LightPath Technologies
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sunny and LightPath is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Sunny Optical Technology and LightPath Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LightPath Technologies 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 LightPath Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LightPath Technologies has no effect on the direction of Sunny Optical i.e., Sunny Optical and LightPath Technologies go up and down completely randomly.
Pair Corralation between Sunny Optical and LightPath Technologies
Assuming the 90 days horizon Sunny Optical is expected to generate 1.22 times less return on investment than LightPath Technologies. In addition to that, Sunny Optical is 1.14 times more volatile than LightPath Technologies. It trades about 0.08 of its total potential returns per unit of risk. LightPath Technologies is currently generating about 0.11 per unit of volatility. If you would invest 123.00 in LightPath Technologies on September 3, 2024 and sell it today you would earn a total of 60.00 from holding LightPath Technologies or generate 48.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sunny Optical Technology vs. LightPath Technologies
Performance |
| Timeline |
| Sunny Optical Technology |
| LightPath Technologies |
Sunny Optical and LightPath Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sunny Optical and LightPath Technologies
The main advantage of trading using opposite Sunny Optical and LightPath Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunny Optical position performs unexpectedly, LightPath Technologies 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 LightPath Technologies will offset losses from the drop in LightPath Technologies' long position.| Sunny Optical vs. KULR Technology Group | Sunny Optical vs. Ouster Inc | Sunny Optical vs. MicroCloud Hologram | Sunny Optical vs. Kopin |
| LightPath Technologies vs. Methode Electronics | LightPath Technologies vs. OSI Systems | LightPath Technologies vs. Plexus Corp | LightPath Technologies vs. CTS Corporation |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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