Correlation Between Sunny Optical and ING Groep
Can any of the company-specific risk be diversified away by investing in both Sunny Optical and ING Groep 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 ING Groep 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 ING Groep NV, you can compare the effects of market volatilities on Sunny Optical and ING Groep 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 ING Groep. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunny Optical and ING Groep.
Diversification Opportunities for Sunny Optical and ING Groep
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Sunny and ING is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Sunny Optical Technology and ING Groep NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ING Groep NV 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 ING Groep. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ING Groep NV has no effect on the direction of Sunny Optical i.e., Sunny Optical and ING Groep go up and down completely randomly.
Pair Corralation between Sunny Optical and ING Groep
Assuming the 90 days horizon Sunny Optical is expected to generate 1.02 times less return on investment than ING Groep. In addition to that, Sunny Optical is 2.9 times more volatile than ING Groep NV. It trades about 0.02 of its total potential returns per unit of risk. ING Groep NV is currently generating about 0.05 per unit of volatility. If you would invest 1,260 in ING Groep NV on September 4, 2024 and sell it today you would earn a total of 205.00 from holding ING Groep NV or generate 16.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
Sunny Optical Technology vs. ING Groep NV
Performance |
| Timeline |
| Sunny Optical Technology |
| ING Groep NV |
Sunny Optical and ING Groep Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sunny Optical and ING Groep
The main advantage of trading using opposite Sunny Optical and ING Groep positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunny Optical position performs unexpectedly, ING Groep 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 ING Groep will offset losses from the drop in ING Groep'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 |
| ING Groep vs. MACOM Technology Solutions | ING Groep vs. Western Copper and | ING Groep vs. Sunny Optical Technology | ING Groep vs. LION ONE METALS |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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