Correlation Between Sunny Optical and International Consolidated
Can any of the company-specific risk be diversified away by investing in both Sunny Optical and International Consolidated 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 International Consolidated 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 International Consolidated Airlines, you can compare the effects of market volatilities on Sunny Optical and International Consolidated 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 International Consolidated. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunny Optical and International Consolidated.
Diversification Opportunities for Sunny Optical and International Consolidated
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sunny and International is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Sunny Optical Technology and International Consolidated Air in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Consolidated 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 International Consolidated. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Consolidated has no effect on the direction of Sunny Optical i.e., Sunny Optical and International Consolidated go up and down completely randomly.
Pair Corralation between Sunny Optical and International Consolidated
Assuming the 90 days horizon Sunny Optical is expected to generate 10.98 times less return on investment than International Consolidated. In addition to that, Sunny Optical is 1.93 times more volatile than International Consolidated Airlines. It trades about 0.01 of its total potential returns per unit of risk. International Consolidated Airlines is currently generating about 0.12 per unit of volatility. If you would invest 161.00 in International Consolidated Airlines on August 25, 2024 and sell it today you would earn a total of 133.00 from holding International Consolidated Airlines or generate 82.61% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sunny Optical Technology vs. International Consolidated Air
Performance |
| Timeline |
| Sunny Optical Technology |
| International Consolidated |
Sunny Optical and International Consolidated Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sunny Optical and International Consolidated
The main advantage of trading using opposite Sunny Optical and International Consolidated positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunny Optical position performs unexpectedly, International Consolidated 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 International Consolidated will offset losses from the drop in International Consolidated's long position.| Sunny Optical vs. Amphenol | Sunny Optical vs. Hon Hai Precision | Sunny Optical vs. Samsung SDI Co | Sunny Optical vs. Corning Incorporated |
| International Consolidated vs. Coeur Mining | International Consolidated vs. Mitsubishi Gas Chemical | International Consolidated vs. Quaker Chemical | International Consolidated vs. Calibre Mining Corp |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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