Correlation Between Sunny Optical and Universal Entertainment
Can any of the company-specific risk be diversified away by investing in both Sunny Optical and Universal Entertainment 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 Universal Entertainment 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 Universal Entertainment, you can compare the effects of market volatilities on Sunny Optical and Universal Entertainment 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 Universal Entertainment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunny Optical and Universal Entertainment.
Diversification Opportunities for Sunny Optical and Universal Entertainment
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Sunny and Universal is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Sunny Optical Technology and Universal Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Universal Entertainment 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 Universal Entertainment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Universal Entertainment has no effect on the direction of Sunny Optical i.e., Sunny Optical and Universal Entertainment go up and down completely randomly.
Pair Corralation between Sunny Optical and Universal Entertainment
Assuming the 90 days horizon Sunny Optical Technology is expected to generate 1.34 times more return on investment than Universal Entertainment. However, Sunny Optical is 1.34 times more volatile than Universal Entertainment. It trades about 0.01 of its potential returns per unit of risk. Universal Entertainment is currently generating about -0.05 per unit of risk. If you would invest 1,053 in Sunny Optical Technology on November 7, 2024 and sell it today you would lose (190.00) from holding Sunny Optical Technology or give up 18.04% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sunny Optical Technology vs. Universal Entertainment
Performance |
| Timeline |
| Sunny Optical Technology |
| Universal Entertainment |
Sunny Optical and Universal Entertainment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sunny Optical and Universal Entertainment
The main advantage of trading using opposite Sunny Optical and Universal Entertainment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunny Optical position performs unexpectedly, Universal Entertainment 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 Universal Entertainment will offset losses from the drop in Universal Entertainment's long position.| Sunny Optical vs. Haier Smart Home | Sunny Optical vs. Hisense Home Appliances | Sunny Optical vs. Air Lease | Sunny Optical vs. OFFICE DEPOT |
| Universal Entertainment vs. Keck Seng Investments | Universal Entertainment vs. Air Transport Services | Universal Entertainment vs. CHRYSALIS INVESTMENTS LTD | Universal Entertainment vs. SEI INVESTMENTS |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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