Correlation Between Sunny Optical and Diamyd Medical
Can any of the company-specific risk be diversified away by investing in both Sunny Optical and Diamyd Medical 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 Diamyd Medical 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 Diamyd Medical AB, you can compare the effects of market volatilities on Sunny Optical and Diamyd Medical 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 Diamyd Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunny Optical and Diamyd Medical.
Diversification Opportunities for Sunny Optical and Diamyd Medical
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Sunny and Diamyd is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Sunny Optical Technology and Diamyd Medical AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Diamyd Medical AB 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 Diamyd Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Diamyd Medical AB has no effect on the direction of Sunny Optical i.e., Sunny Optical and Diamyd Medical go up and down completely randomly.
Pair Corralation between Sunny Optical and Diamyd Medical
Assuming the 90 days horizon Sunny Optical Technology is expected to generate 1.2 times more return on investment than Diamyd Medical. However, Sunny Optical is 1.2 times more volatile than Diamyd Medical AB. It trades about 0.23 of its potential returns per unit of risk. Diamyd Medical AB is currently generating about -0.11 per unit of risk. If you would invest 578.00 in Sunny Optical Technology on August 29, 2024 and sell it today you would earn a total of 124.00 from holding Sunny Optical Technology or generate 21.45% 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. Diamyd Medical AB
Performance |
| Timeline |
| Sunny Optical Technology |
| Diamyd Medical AB |
Sunny Optical and Diamyd Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sunny Optical and Diamyd Medical
The main advantage of trading using opposite Sunny Optical and Diamyd Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunny Optical position performs unexpectedly, Diamyd Medical 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 Diamyd Medical will offset losses from the drop in Diamyd Medical's long position.The idea behind Sunny Optical Technology and Diamyd Medical AB 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.| Diamyd Medical vs. Superior Plus Corp | Diamyd Medical vs. NMI Holdings | Diamyd Medical vs. Origin Agritech | Diamyd Medical vs. SIVERS SEMICONDUCTORS AB |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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