Correlation Between Sunny Optical and Infosys
Can any of the company-specific risk be diversified away by investing in both Sunny Optical and Infosys 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 Infosys 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 Infosys Limited, you can compare the effects of market volatilities on Sunny Optical and Infosys 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 Infosys. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunny Optical and Infosys.
Diversification Opportunities for Sunny Optical and Infosys
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sunny and Infosys is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Sunny Optical Technology and Infosys Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Infosys Limited 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 Infosys. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Infosys Limited has no effect on the direction of Sunny Optical i.e., Sunny Optical and Infosys go up and down completely randomly.
Pair Corralation between Sunny Optical and Infosys
Assuming the 90 days horizon Sunny Optical Technology is expected to under-perform the Infosys. But the stock apears to be less risky and, when comparing its historical volatility, Sunny Optical Technology is 1.02 times less risky than Infosys. The stock trades about -0.07 of its potential returns per unit of risk. The Infosys Limited is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 2,130 in Infosys Limited on October 27, 2024 and sell it today you would lose (70.00) from holding Infosys Limited or give up 3.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sunny Optical Technology vs. Infosys Limited
Performance |
| Timeline |
| Sunny Optical Technology |
| Infosys Limited |
Sunny Optical and Infosys Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sunny Optical and Infosys
The main advantage of trading using opposite Sunny Optical and Infosys positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunny Optical position performs unexpectedly, Infosys 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 Infosys will offset losses from the drop in Infosys' long position.| Sunny Optical vs. Hon Hai Precision | Sunny Optical vs. Samsung SDI Co | Sunny Optical vs. Corning Incorporated | Sunny Optical vs. Mitsubishi Electric |
| Infosys vs. ECHO INVESTMENT ZY | Infosys vs. CHRYSALIS INVESTMENTS LTD | Infosys vs. Guangdong Investment Limited | Infosys vs. VIVA WINE GROUP |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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