Correlation Between Sunny Optical and Corporate Travel
Can any of the company-specific risk be diversified away by investing in both Sunny Optical and Corporate Travel 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 Corporate Travel 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 Corporate Travel Management, you can compare the effects of market volatilities on Sunny Optical and Corporate Travel 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 Corporate Travel. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunny Optical and Corporate Travel.
Diversification Opportunities for Sunny Optical and Corporate Travel
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Sunny and Corporate is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Sunny Optical Technology and Corporate Travel Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Corporate Travel Man 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 Corporate Travel. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Corporate Travel Man has no effect on the direction of Sunny Optical i.e., Sunny Optical and Corporate Travel go up and down completely randomly.
Pair Corralation between Sunny Optical and Corporate Travel
Assuming the 90 days horizon Sunny Optical Technology is expected to generate 1.3 times more return on investment than Corporate Travel. However, Sunny Optical is 1.3 times more volatile than Corporate Travel Management. It trades about 0.16 of its potential returns per unit of risk. Corporate Travel Management is currently generating about 0.09 per unit of risk. If you would invest 635.00 in Sunny Optical Technology on September 13, 2024 and sell it today you would earn a total of 160.00 from holding Sunny Optical Technology or generate 25.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sunny Optical Technology vs. Corporate Travel Management
Performance |
| Timeline |
| Sunny Optical Technology |
| Corporate Travel Man |
Sunny Optical and Corporate Travel Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sunny Optical and Corporate Travel
The main advantage of trading using opposite Sunny Optical and Corporate Travel positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunny Optical position performs unexpectedly, Corporate Travel 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 Corporate Travel will offset losses from the drop in Corporate Travel's long position.| Sunny Optical vs. Hubbell Incorporated | Sunny Optical vs. TDK Corporation | Sunny Optical vs. Superior Plus Corp | Sunny Optical vs. SIVERS SEMICONDUCTORS AB |
| Corporate Travel vs. Apple Inc | Corporate Travel vs. Apple Inc | Corporate Travel vs. Apple Inc | Corporate Travel vs. Apple Inc |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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