Correlation Between Sunny Optical and SENECA FOODS-A
Can any of the company-specific risk be diversified away by investing in both Sunny Optical and SENECA FOODS-A 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 SENECA FOODS-A 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 SENECA FOODS A, you can compare the effects of market volatilities on Sunny Optical and SENECA FOODS-A 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 SENECA FOODS-A. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunny Optical and SENECA FOODS-A.
Diversification Opportunities for Sunny Optical and SENECA FOODS-A
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sunny and SENECA is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Sunny Optical Technology and SENECA FOODS A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SENECA FOODS A 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 SENECA FOODS-A. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SENECA FOODS A has no effect on the direction of Sunny Optical i.e., Sunny Optical and SENECA FOODS-A go up and down completely randomly.
Pair Corralation between Sunny Optical and SENECA FOODS-A
Assuming the 90 days horizon Sunny Optical is expected to generate 5.43 times less return on investment than SENECA FOODS-A. In addition to that, Sunny Optical is 1.16 times more volatile than SENECA FOODS A. It trades about 0.01 of its total potential returns per unit of risk. SENECA FOODS A is currently generating about 0.05 per unit of volatility. If you would invest 4,380 in SENECA FOODS A on September 1, 2024 and sell it today you would earn a total of 2,070 from holding SENECA FOODS A or generate 47.26% 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. SENECA FOODS A
Performance |
| Timeline |
| Sunny Optical Technology |
| SENECA FOODS A |
Sunny Optical and SENECA FOODS-A Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sunny Optical and SENECA FOODS-A
The main advantage of trading using opposite Sunny Optical and SENECA FOODS-A positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunny Optical position performs unexpectedly, SENECA FOODS-A 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 SENECA FOODS-A will offset losses from the drop in SENECA FOODS-A'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 |
| SENECA FOODS-A vs. SIVERS SEMICONDUCTORS AB | SENECA FOODS-A vs. Darden Restaurants | SENECA FOODS-A vs. Reliance Steel Aluminum | SENECA FOODS-A vs. Q2M Managementberatung AG |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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