Correlation Between Sunny Optical and Singapore Telecommunicatio
Can any of the company-specific risk be diversified away by investing in both Sunny Optical and Singapore Telecommunicatio 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 Singapore Telecommunicatio 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 Singapore Telecommunications Limited, you can compare the effects of market volatilities on Sunny Optical and Singapore Telecommunicatio 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 Singapore Telecommunicatio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunny Optical and Singapore Telecommunicatio.
Diversification Opportunities for Sunny Optical and Singapore Telecommunicatio
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Sunny and Singapore is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Sunny Optical Technology and Singapore Telecommunications L in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Singapore Telecommunicatio 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 Singapore Telecommunicatio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Singapore Telecommunicatio has no effect on the direction of Sunny Optical i.e., Sunny Optical and Singapore Telecommunicatio go up and down completely randomly.
Pair Corralation between Sunny Optical and Singapore Telecommunicatio
Assuming the 90 days horizon Sunny Optical Technology is expected to generate 1.33 times more return on investment than Singapore Telecommunicatio. However, Sunny Optical is 1.33 times more volatile than Singapore Telecommunications Limited. It trades about 0.29 of its potential returns per unit of risk. Singapore Telecommunications Limited is currently generating about 0.02 per unit of risk. If you would invest 671.00 in Sunny Optical Technology on September 13, 2024 and sell it today you would earn a total of 124.00 from holding Sunny Optical Technology or generate 18.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sunny Optical Technology vs. Singapore Telecommunications L
Performance |
| Timeline |
| Sunny Optical Technology |
| Singapore Telecommunicatio |
Sunny Optical and Singapore Telecommunicatio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sunny Optical and Singapore Telecommunicatio
The main advantage of trading using opposite Sunny Optical and Singapore Telecommunicatio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunny Optical position performs unexpectedly, Singapore Telecommunicatio 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 Singapore Telecommunicatio will offset losses from the drop in Singapore Telecommunicatio'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 |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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