Correlation Between Sunny Optical and Zoom Video
Can any of the company-specific risk be diversified away by investing in both Sunny Optical and Zoom Video 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 Zoom Video 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 Zoom Video Communications, you can compare the effects of market volatilities on Sunny Optical and Zoom Video 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 Zoom Video. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunny Optical and Zoom Video.
Diversification Opportunities for Sunny Optical and Zoom Video
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sunny and Zoom is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Sunny Optical Technology and Zoom Video Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zoom Video Communications 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 Zoom Video. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zoom Video Communications has no effect on the direction of Sunny Optical i.e., Sunny Optical and Zoom Video go up and down completely randomly.
Pair Corralation between Sunny Optical and Zoom Video
Assuming the 90 days horizon Sunny Optical Technology is expected to generate 1.7 times more return on investment than Zoom Video. However, Sunny Optical is 1.7 times more volatile than Zoom Video Communications. It trades about 0.07 of its potential returns per unit of risk. Zoom Video Communications is currently generating about -0.02 per unit of risk. If you would invest 795.00 in Sunny Optical Technology on October 11, 2024 and sell it today you would earn a total of 22.00 from holding Sunny Optical Technology or generate 2.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 94.44% |
| Values | Daily Returns |
Sunny Optical Technology vs. Zoom Video Communications
Performance |
| Timeline |
| Sunny Optical Technology |
| Zoom Video Communications |
Sunny Optical and Zoom Video Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sunny Optical and Zoom Video
The main advantage of trading using opposite Sunny Optical and Zoom Video positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunny Optical position performs unexpectedly, Zoom Video 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 Zoom Video will offset losses from the drop in Zoom Video'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 |
| Zoom Video vs. China Communications Services | Zoom Video vs. Entravision Communications | Zoom Video vs. Shenandoah Telecommunications | Zoom Video vs. Singapore Telecommunications Limited |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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