Correlation Between Sunny Optical and H FARM
Can any of the company-specific risk be diversified away by investing in both Sunny Optical and H FARM 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 H FARM 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 H FARM SPA, you can compare the effects of market volatilities on Sunny Optical and H FARM 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 H FARM. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunny Optical and H FARM.
Diversification Opportunities for Sunny Optical and H FARM
-0.44 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sunny and 5JQ is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Sunny Optical Technology and H FARM SPA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on H FARM SPA 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 H FARM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of H FARM SPA has no effect on the direction of Sunny Optical i.e., Sunny Optical and H FARM go up and down completely randomly.
Pair Corralation between Sunny Optical and H FARM
Assuming the 90 days horizon Sunny Optical Technology is expected to generate 1.03 times more return on investment than H FARM. However, Sunny Optical is 1.03 times more volatile than H FARM SPA. It trades about 0.09 of its potential returns per unit of risk. H FARM SPA is currently generating about -0.07 per unit of risk. If you would invest 664.00 in Sunny Optical Technology on September 3, 2024 and sell it today you would earn a total of 89.00 from holding Sunny Optical Technology or generate 13.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sunny Optical Technology vs. H FARM SPA
Performance |
| Timeline |
| Sunny Optical Technology |
| H FARM SPA |
Sunny Optical and H FARM Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sunny Optical and H FARM
The main advantage of trading using opposite Sunny Optical and H FARM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunny Optical position performs unexpectedly, H FARM 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 H FARM will offset losses from the drop in H FARM's long position.| Sunny Optical vs. Hon Hai Precision | Sunny Optical vs. Samsung SDI Co | Sunny Optical vs. Murata Manufacturing Co | Sunny Optical vs. Mitsubishi Electric |
| H FARM vs. ADRIATIC METALS LS 013355 | H FARM vs. GALENA MINING LTD | H FARM vs. Sunny Optical Technology | H FARM vs. GREENX METALS LTD |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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