Correlation Between Sunny Optical and Air New
Can any of the company-specific risk be diversified away by investing in both Sunny Optical and Air New 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 Air New 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 Air New Zealand, you can compare the effects of market volatilities on Sunny Optical and Air New 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 Air New. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunny Optical and Air New.
Diversification Opportunities for Sunny Optical and Air New
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sunny and Air is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Sunny Optical Technology and Air New Zealand in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Air New Zealand 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 Air New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Air New Zealand has no effect on the direction of Sunny Optical i.e., Sunny Optical and Air New go up and down completely randomly.
Pair Corralation between Sunny Optical and Air New
Assuming the 90 days horizon Sunny Optical Technology is expected to generate 1.61 times more return on investment than Air New. However, Sunny Optical is 1.61 times more volatile than Air New Zealand. It trades about 0.08 of its potential returns per unit of risk. Air New Zealand is currently generating about 0.08 per unit of risk. If you would invest 858.00 in Sunny Optical Technology on October 28, 2024 and sell it today you would earn a total of 41.00 from holding Sunny Optical Technology or generate 4.78% 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. Air New Zealand
Performance |
| Timeline |
| Sunny Optical Technology |
| Air New Zealand |
Sunny Optical and Air New Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sunny Optical and Air New
The main advantage of trading using opposite Sunny Optical and Air New positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunny Optical position performs unexpectedly, Air New 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 Air New will offset losses from the drop in Air New's long position.| Sunny Optical vs. Hon Hai Precision | Sunny Optical vs. Samsung SDI Co | Sunny Optical vs. Corning Incorporated | Sunny Optical vs. Mitsubishi Electric |
| Air New vs. NXP Semiconductors NV | Air New vs. G III Apparel Group | Air New vs. FIRST SHIP LEASE | Air New vs. YATRA ONLINE DL 0001 |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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