Correlation Between Sunny Optical and HYATT HOTELS-A
Can any of the company-specific risk be diversified away by investing in both Sunny Optical and HYATT HOTELS-A 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 HYATT HOTELS-A 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 HYATT HOTELS A, you can compare the effects of market volatilities on Sunny Optical and HYATT HOTELS-A 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 HYATT HOTELS-A. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunny Optical and HYATT HOTELS-A.
Diversification Opportunities for Sunny Optical and HYATT HOTELS-A
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sunny and HYATT is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Sunny Optical Technology and HYATT HOTELS A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HYATT HOTELS A 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 HYATT HOTELS-A. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HYATT HOTELS A has no effect on the direction of Sunny Optical i.e., Sunny Optical and HYATT HOTELS-A go up and down completely randomly.
Pair Corralation between Sunny Optical and HYATT HOTELS-A
Assuming the 90 days horizon Sunny Optical Technology is expected to generate 2.0 times more return on investment than HYATT HOTELS-A. However, Sunny Optical is 2.0 times more volatile than HYATT HOTELS A. It trades about 0.13 of its potential returns per unit of risk. HYATT HOTELS A is currently generating about 0.1 per unit of risk. If you would invest 580.00 in Sunny Optical Technology on August 27, 2024 and sell it today you would earn a total of 122.00 from holding Sunny Optical Technology or generate 21.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sunny Optical Technology vs. HYATT HOTELS A
Performance |
| Timeline |
| Sunny Optical Technology |
| HYATT HOTELS A |
Sunny Optical and HYATT HOTELS-A Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sunny Optical and HYATT HOTELS-A
The main advantage of trading using opposite Sunny Optical and HYATT HOTELS-A positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunny Optical position performs unexpectedly, HYATT HOTELS-A 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 HYATT HOTELS-A will offset losses from the drop in HYATT HOTELS-A's long position.The idea behind Sunny Optical Technology and HYATT HOTELS A pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| HYATT HOTELS-A vs. Cogent Communications Holdings | HYATT HOTELS-A vs. SK TELECOM TDADR | HYATT HOTELS-A vs. AM EAGLE OUTFITTERS | HYATT HOTELS-A vs. Major Drilling Group |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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