Correlation Between Sunny Optical and Canadian Utilities
Can any of the company-specific risk be diversified away by investing in both Sunny Optical and Canadian Utilities 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 Canadian Utilities 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 Canadian Utilities Limited, you can compare the effects of market volatilities on Sunny Optical and Canadian Utilities 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 Canadian Utilities. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunny Optical and Canadian Utilities.
Diversification Opportunities for Sunny Optical and Canadian Utilities
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Sunny and Canadian is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Sunny Optical Technology and Canadian Utilities Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Canadian Utilities 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 Canadian Utilities. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Canadian Utilities has no effect on the direction of Sunny Optical i.e., Sunny Optical and Canadian Utilities go up and down completely randomly.
Pair Corralation between Sunny Optical and Canadian Utilities
Assuming the 90 days horizon Sunny Optical Technology is expected to generate 3.22 times more return on investment than Canadian Utilities. However, Sunny Optical is 3.22 times more volatile than Canadian Utilities Limited. It trades about 0.1 of its potential returns per unit of risk. Canadian Utilities Limited is currently generating about 0.13 per unit of risk. If you would invest 553.00 in Sunny Optical Technology on October 18, 2024 and sell it today you would earn a total of 228.00 from holding Sunny Optical Technology or generate 41.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sunny Optical Technology vs. Canadian Utilities Limited
Performance |
| Timeline |
| Sunny Optical Technology |
| Canadian Utilities |
Sunny Optical and Canadian Utilities Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sunny Optical and Canadian Utilities
The main advantage of trading using opposite Sunny Optical and Canadian Utilities positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunny Optical position performs unexpectedly, Canadian Utilities 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 Canadian Utilities will offset losses from the drop in Canadian Utilities' long position.| Sunny Optical vs. Columbia Sportswear | Sunny Optical vs. Scottish Mortgage Investment | Sunny Optical vs. PennantPark Investment | Sunny Optical vs. New Residential Investment |
| Canadian Utilities vs. GLG LIFE TECH | Canadian Utilities vs. New Residential Investment | Canadian Utilities vs. FIRST SAVINGS FINL | Canadian Utilities vs. Sunny Optical Technology |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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