Correlation Between Sunny Optical and CN MODERN
Can any of the company-specific risk be diversified away by investing in both Sunny Optical and CN MODERN 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 CN MODERN 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 CN MODERN DAIRY, you can compare the effects of market volatilities on Sunny Optical and CN MODERN 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 CN MODERN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunny Optical and CN MODERN.
Diversification Opportunities for Sunny Optical and CN MODERN
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sunny and 07M is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Sunny Optical Technology and CN MODERN DAIRY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CN MODERN DAIRY 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 CN MODERN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CN MODERN DAIRY has no effect on the direction of Sunny Optical i.e., Sunny Optical and CN MODERN go up and down completely randomly.
Pair Corralation between Sunny Optical and CN MODERN
Assuming the 90 days horizon Sunny Optical Technology is expected to under-perform the CN MODERN. In addition to that, Sunny Optical is 1.28 times more volatile than CN MODERN DAIRY. It trades about 0.0 of its total potential returns per unit of risk. CN MODERN DAIRY is currently generating about 0.02 per unit of volatility. If you would invest 9.19 in CN MODERN DAIRY on October 11, 2024 and sell it today you would earn a total of 0.76 from holding CN MODERN DAIRY or generate 8.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Sunny Optical Technology vs. CN MODERN DAIRY
Performance |
| Timeline |
| Sunny Optical Technology |
| CN MODERN DAIRY |
Sunny Optical and CN MODERN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sunny Optical and CN MODERN
The main advantage of trading using opposite Sunny Optical and CN MODERN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunny Optical position performs unexpectedly, CN MODERN 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 CN MODERN will offset losses from the drop in CN MODERN's long position.| Sunny Optical vs. GREENX METALS LTD | Sunny Optical vs. De Grey Mining | Sunny Optical vs. Kingdee International Software | Sunny Optical vs. Lion Biotechnologies |
| CN MODERN vs. CITY OFFICE REIT | CN MODERN vs. ANTA SPORTS PRODUCT | CN MODERN vs. SPORT LISBOA E | CN MODERN vs. SOEDER SPORTFISKE AB |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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