Correlation Between SUN and CIM FINANCIAL
Can any of the company-specific risk be diversified away by investing in both SUN and CIM FINANCIAL 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 SUN and CIM FINANCIAL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SUN LIMITED and CIM FINANCIAL SERVICES, you can compare the effects of market volatilities on SUN and CIM FINANCIAL 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 SUN with a short position of CIM FINANCIAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of SUN and CIM FINANCIAL.
Diversification Opportunities for SUN and CIM FINANCIAL
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SUN and CIM is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding SUN LIMITED and CIM FINANCIAL SERVICES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CIM FINANCIAL SERVICES and SUN 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 SUN LIMITED are associated (or correlated) with CIM FINANCIAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CIM FINANCIAL SERVICES has no effect on the direction of SUN i.e., SUN and CIM FINANCIAL go up and down completely randomly.
Pair Corralation between SUN and CIM FINANCIAL
Assuming the 90 days trading horizon SUN LIMITED is expected to generate 2.2 times more return on investment than CIM FINANCIAL. However, SUN is 2.2 times more volatile than CIM FINANCIAL SERVICES. It trades about 0.06 of its potential returns per unit of risk. CIM FINANCIAL SERVICES is currently generating about 0.07 per unit of risk. If you would invest 2,510 in SUN LIMITED on December 1, 2024 and sell it today you would earn a total of 1,660 from holding SUN LIMITED or generate 66.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 93.22% |
| Values | Daily Returns |
SUN LIMITED vs. CIM FINANCIAL SERVICES
Performance |
| Timeline |
| SUN LIMITED |
| CIM FINANCIAL SERVICES |
SUN and CIM FINANCIAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SUN and CIM FINANCIAL
The main advantage of trading using opposite SUN and CIM FINANCIAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SUN position performs unexpectedly, CIM FINANCIAL 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 CIM FINANCIAL will offset losses from the drop in CIM FINANCIAL's long position.| SUN vs. FINCORP INVESTMENT LTD | SUN vs. MAURITIUS CHEMICAL FERTILIZER | SUN vs. ASTORIA INVESTMENT LTD | SUN vs. QUALITY BEVERAGES LTD |
| CIM FINANCIAL vs. PSG FINANCIAL SERVICES | CIM FINANCIAL vs. CAVELL TOURISTIC INVESTMENTS | CIM FINANCIAL vs. PHOENIX INVESTMENT PANY | CIM FINANCIAL vs. MAURITIUS CHEMICAL FERTILIZER |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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