Correlation Between Sunny Optical and KORIAN (KO2SG)
Can any of the company-specific risk be diversified away by investing in both Sunny Optical and KORIAN (KO2SG) 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 KORIAN (KO2SG) 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 KORIAN, you can compare the effects of market volatilities on Sunny Optical and KORIAN (KO2SG) 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 KORIAN (KO2SG). Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunny Optical and KORIAN (KO2SG).
Diversification Opportunities for Sunny Optical and KORIAN (KO2SG)
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Sunny and KORIAN is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Sunny Optical Technology and KORIAN in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KORIAN (KO2SG) 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 KORIAN (KO2SG). Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KORIAN (KO2SG) has no effect on the direction of Sunny Optical i.e., Sunny Optical and KORIAN (KO2SG) go up and down completely randomly.
Pair Corralation between Sunny Optical and KORIAN (KO2SG)
Assuming the 90 days horizon Sunny Optical Technology is expected to generate 0.61 times more return on investment than KORIAN (KO2SG). However, Sunny Optical Technology is 1.63 times less risky than KORIAN (KO2SG). It trades about 0.03 of its potential returns per unit of risk. KORIAN is currently generating about -0.03 per unit of risk. If you would invest 736.00 in Sunny Optical Technology on September 12, 2024 and sell it today you would earn a total of 71.00 from holding Sunny Optical Technology or generate 9.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.72% |
| Values | Daily Returns |
Sunny Optical Technology vs. KORIAN
Performance |
| Timeline |
| Sunny Optical Technology |
| KORIAN (KO2SG) |
Sunny Optical and KORIAN (KO2SG) Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sunny Optical and KORIAN (KO2SG)
The main advantage of trading using opposite Sunny Optical and KORIAN (KO2SG) positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunny Optical position performs unexpectedly, KORIAN (KO2SG) 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 KORIAN (KO2SG) will offset losses from the drop in KORIAN (KO2SG)'s long position.| Sunny Optical vs. Hubbell Incorporated | Sunny Optical vs. TDK Corporation | Sunny Optical vs. Superior Plus Corp | Sunny Optical vs. SIVERS SEMICONDUCTORS AB |
| KORIAN (KO2SG) vs. Materialise NV | KORIAN (KO2SG) vs. Iridium Communications | KORIAN (KO2SG) vs. Eagle Materials | KORIAN (KO2SG) vs. APPLIED MATERIALS |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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