Correlation Between Sunny Optical and SCOTT TECHNOLOGY
Can any of the company-specific risk be diversified away by investing in both Sunny Optical and SCOTT TECHNOLOGY 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 SCOTT TECHNOLOGY 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 SCOTT TECHNOLOGY, you can compare the effects of market volatilities on Sunny Optical and SCOTT TECHNOLOGY 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 SCOTT TECHNOLOGY. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunny Optical and SCOTT TECHNOLOGY.
Diversification Opportunities for Sunny Optical and SCOTT TECHNOLOGY
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sunny and SCOTT is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Sunny Optical Technology and SCOTT TECHNOLOGY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SCOTT TECHNOLOGY 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 SCOTT TECHNOLOGY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SCOTT TECHNOLOGY has no effect on the direction of Sunny Optical i.e., Sunny Optical and SCOTT TECHNOLOGY go up and down completely randomly.
Pair Corralation between Sunny Optical and SCOTT TECHNOLOGY
Assuming the 90 days horizon Sunny Optical Technology is expected to generate 1.02 times more return on investment than SCOTT TECHNOLOGY. However, Sunny Optical is 1.02 times more volatile than SCOTT TECHNOLOGY. It trades about 0.23 of its potential returns per unit of risk. SCOTT TECHNOLOGY is currently generating about 0.1 per unit of risk. If you would invest 585.00 in Sunny Optical Technology on September 20, 2024 and sell it today you would earn a total of 225.00 from holding Sunny Optical Technology or generate 38.46% 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. SCOTT TECHNOLOGY
Performance |
| Timeline |
| Sunny Optical Technology |
| SCOTT TECHNOLOGY |
Sunny Optical and SCOTT TECHNOLOGY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sunny Optical and SCOTT TECHNOLOGY
The main advantage of trading using opposite Sunny Optical and SCOTT TECHNOLOGY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunny Optical position performs unexpectedly, SCOTT TECHNOLOGY 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 SCOTT TECHNOLOGY will offset losses from the drop in SCOTT TECHNOLOGY's long position.| Sunny Optical vs. KIMBALL ELECTRONICS | Sunny Optical vs. TT Electronics PLC | Sunny Optical vs. ARROW ELECTRONICS | Sunny Optical vs. ULTRA CLEAN HLDGS |
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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 Stocks Directory module to find actively traded stocks across global markets.
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