Correlation Between Sunny Optical and Stewart Information
Can any of the company-specific risk be diversified away by investing in both Sunny Optical and Stewart Information 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 Stewart Information 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 Stewart Information Services, you can compare the effects of market volatilities on Sunny Optical and Stewart Information 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 Stewart Information. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunny Optical and Stewart Information.
Diversification Opportunities for Sunny Optical and Stewart Information
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Sunny and Stewart is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Sunny Optical Technology and Stewart Information Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stewart Information 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 Stewart Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stewart Information has no effect on the direction of Sunny Optical i.e., Sunny Optical and Stewart Information go up and down completely randomly.
Pair Corralation between Sunny Optical and Stewart Information
Assuming the 90 days horizon Sunny Optical is expected to generate 6.31 times less return on investment than Stewart Information. In addition to that, Sunny Optical is 2.0 times more volatile than Stewart Information Services. It trades about 0.01 of its total potential returns per unit of risk. Stewart Information Services is currently generating about 0.1 per unit of volatility. If you would invest 3,758 in Stewart Information Services on September 1, 2024 and sell it today you would earn a total of 3,142 from holding Stewart Information Services or generate 83.61% 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. Stewart Information Services
Performance |
| Timeline |
| Sunny Optical Technology |
| Stewart Information |
Sunny Optical and Stewart Information Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sunny Optical and Stewart Information
The main advantage of trading using opposite Sunny Optical and Stewart Information positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunny Optical position performs unexpectedly, Stewart Information 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 Stewart Information will offset losses from the drop in Stewart Information's long position.| Sunny Optical vs. Altair Engineering | Sunny Optical vs. MGIC INVESTMENT | Sunny Optical vs. PennyMac Mortgage Investment | Sunny Optical vs. REGAL ASIAN INVESTMENTS |
| Stewart Information vs. Singapore Telecommunications Limited | Stewart Information vs. Harmony Gold Mining | Stewart Information vs. Verizon Communications | Stewart Information vs. Chesapeake Utilities |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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