Correlation Between Sunny Optical and Nisshin Seifun
Can any of the company-specific risk be diversified away by investing in both Sunny Optical and Nisshin Seifun 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 Nisshin Seifun 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 Nisshin Seifun Group, you can compare the effects of market volatilities on Sunny Optical and Nisshin Seifun 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 Nisshin Seifun. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunny Optical and Nisshin Seifun.
Diversification Opportunities for Sunny Optical and Nisshin Seifun
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Sunny and Nisshin is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding Sunny Optical Technology and Nisshin Seifun Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nisshin Seifun Group 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 Nisshin Seifun. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nisshin Seifun Group has no effect on the direction of Sunny Optical i.e., Sunny Optical and Nisshin Seifun go up and down completely randomly.
Pair Corralation between Sunny Optical and Nisshin Seifun
Assuming the 90 days horizon Sunny Optical Technology is expected to generate 3.91 times more return on investment than Nisshin Seifun. However, Sunny Optical is 3.91 times more volatile than Nisshin Seifun Group. It trades about 0.12 of its potential returns per unit of risk. Nisshin Seifun Group is currently generating about -0.17 per unit of risk. If you would invest 802.00 in Sunny Optical Technology on November 3, 2024 and sell it today you would earn a total of 73.00 from holding Sunny Optical Technology or generate 9.1% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Sunny Optical Technology vs. Nisshin Seifun Group
Performance |
Timeline |
Sunny Optical Technology |
Nisshin Seifun Group |
Sunny Optical and Nisshin Seifun Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Sunny Optical and Nisshin Seifun
The main advantage of trading using opposite Sunny Optical and Nisshin Seifun positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunny Optical position performs unexpectedly, Nisshin Seifun 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 Nisshin Seifun will offset losses from the drop in Nisshin Seifun's long position.Sunny Optical vs. UNITED RENTALS | Sunny Optical vs. NTT DATA | Sunny Optical vs. LOANDEPOT INC A | Sunny Optical vs. MICRONIC MYDATA |
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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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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