Correlation Between Sunny Optical and THRACE PLASTICS
Can any of the company-specific risk be diversified away by investing in both Sunny Optical and THRACE PLASTICS 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 THRACE PLASTICS 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 THRACE PLASTICS, you can compare the effects of market volatilities on Sunny Optical and THRACE PLASTICS 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 THRACE PLASTICS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunny Optical and THRACE PLASTICS.
Diversification Opportunities for Sunny Optical and THRACE PLASTICS
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Sunny and THRACE is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding Sunny Optical Technology and THRACE PLASTICS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on THRACE PLASTICS 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 THRACE PLASTICS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of THRACE PLASTICS has no effect on the direction of Sunny Optical i.e., Sunny Optical and THRACE PLASTICS go up and down completely randomly.
Pair Corralation between Sunny Optical and THRACE PLASTICS
Assuming the 90 days horizon Sunny Optical Technology is expected to generate 3.15 times more return on investment than THRACE PLASTICS. However, Sunny Optical is 3.15 times more volatile than THRACE PLASTICS. It trades about 0.06 of its potential returns per unit of risk. THRACE PLASTICS is currently generating about 0.0 per unit of risk. If you would invest 561.00 in Sunny Optical Technology on November 7, 2024 and sell it today you would earn a total of 302.00 from holding Sunny Optical Technology or generate 53.83% 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. THRACE PLASTICS
Performance |
| Timeline |
| Sunny Optical Technology |
| THRACE PLASTICS |
Sunny Optical and THRACE PLASTICS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sunny Optical and THRACE PLASTICS
The main advantage of trading using opposite Sunny Optical and THRACE PLASTICS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunny Optical position performs unexpectedly, THRACE PLASTICS 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 THRACE PLASTICS will offset losses from the drop in THRACE PLASTICS's long position.| Sunny Optical vs. FONIX MOBILE PLC | Sunny Optical vs. BioNTech SE | Sunny Optical vs. FORTRESS BIOTECHPRFA 25 | Sunny Optical vs. AAC TECHNOLOGHLDGADR |
| THRACE PLASTICS vs. Salesforce | THRACE PLASTICS vs. Tyson Foods | THRACE PLASTICS vs. Carnegie Clean Energy | THRACE PLASTICS vs. GungHo Online Entertainment |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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