Correlation Between Sun Vending and Lease IT
Can any of the company-specific risk be diversified away by investing in both Sun Vending and Lease IT 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 Vending and Lease IT into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sun Vending Technology and Lease IT Public, you can compare the effects of market volatilities on Sun Vending and Lease IT 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 Vending with a short position of Lease IT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sun Vending and Lease IT.
Diversification Opportunities for Sun Vending and Lease IT
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Sun and Lease is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Sun Vending Technology and Lease IT Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lease IT Public and Sun Vending 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 Vending Technology are associated (or correlated) with Lease IT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lease IT Public has no effect on the direction of Sun Vending i.e., Sun Vending and Lease IT go up and down completely randomly.
Pair Corralation between Sun Vending and Lease IT
Assuming the 90 days trading horizon Sun Vending Technology is expected to generate 0.38 times more return on investment than Lease IT. However, Sun Vending Technology is 2.64 times less risky than Lease IT. It trades about 0.1 of its potential returns per unit of risk. Lease IT Public is currently generating about -0.22 per unit of risk. If you would invest 151.00 in Sun Vending Technology on October 7, 2024 and sell it today you would earn a total of 4.00 from holding Sun Vending Technology or generate 2.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sun Vending Technology vs. Lease IT Public
Performance |
| Timeline |
| Sun Vending Technology |
| Lease IT Public |
Sun Vending and Lease IT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sun Vending and Lease IT
The main advantage of trading using opposite Sun Vending and Lease IT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sun Vending position performs unexpectedly, Lease IT 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 Lease IT will offset losses from the drop in Lease IT's long position.| Sun Vending vs. Hana Microelectronics Public | Sun Vending vs. Global Power Synergy | Sun Vending vs. Siam Global House | Sun Vending vs. Gulf Energy Development |
| Lease IT vs. Multibax Public | Lease IT vs. Forth Smart Service | Lease IT vs. LPN Development Public | Lease IT vs. Netbay Public |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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