Correlation Between Sunny Optical and Strategic Education
Can any of the company-specific risk be diversified away by investing in both Sunny Optical and Strategic Education 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 Strategic Education 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 Strategic Education, you can compare the effects of market volatilities on Sunny Optical and Strategic Education 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 Strategic Education. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunny Optical and Strategic Education.
Diversification Opportunities for Sunny Optical and Strategic Education
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sunny and Strategic is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Sunny Optical Technology and Strategic Education in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Strategic Education 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 Strategic Education. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Strategic Education has no effect on the direction of Sunny Optical i.e., Sunny Optical and Strategic Education go up and down completely randomly.
Pair Corralation between Sunny Optical and Strategic Education
Assuming the 90 days horizon Sunny Optical Technology is expected to generate 3.56 times more return on investment than Strategic Education. However, Sunny Optical is 3.56 times more volatile than Strategic Education. It trades about 0.12 of its potential returns per unit of risk. Strategic Education is currently generating about 0.18 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 65.00 from holding Sunny Optical Technology or generate 8.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sunny Optical Technology vs. Strategic Education
Performance |
| Timeline |
| Sunny Optical Technology |
| Strategic Education |
Sunny Optical and Strategic Education Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sunny Optical and Strategic Education
The main advantage of trading using opposite Sunny Optical and Strategic Education positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunny Optical position performs unexpectedly, Strategic Education 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 Strategic Education will offset losses from the drop in Strategic Education's long position.| Sunny Optical vs. Charter Communications | Sunny Optical vs. Cognizant Technology Solutions | Sunny Optical vs. SK TELECOM TDADR | Sunny Optical vs. X FAB Silicon Foundries |
| Strategic Education vs. Perdoceo Education | Strategic Education vs. SCANSOURCE | Strategic Education vs. Adtalem Global Education | Strategic Education vs. betterU Education Corp |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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