Correlation Between Sunny Optical and ASPEN TECHINC
Can any of the company-specific risk be diversified away by investing in both Sunny Optical and ASPEN TECHINC 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 ASPEN TECHINC 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 ASPEN TECHINC DL, you can compare the effects of market volatilities on Sunny Optical and ASPEN TECHINC 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 ASPEN TECHINC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunny Optical and ASPEN TECHINC.
Diversification Opportunities for Sunny Optical and ASPEN TECHINC
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Sunny and ASPEN is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Sunny Optical Technology and ASPEN TECHINC DL in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ASPEN TECHINC DL 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 ASPEN TECHINC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ASPEN TECHINC DL has no effect on the direction of Sunny Optical i.e., Sunny Optical and ASPEN TECHINC go up and down completely randomly.
Pair Corralation between Sunny Optical and ASPEN TECHINC
Assuming the 90 days horizon Sunny Optical Technology is expected to generate 2.05 times more return on investment than ASPEN TECHINC. However, Sunny Optical is 2.05 times more volatile than ASPEN TECHINC DL. It trades about 0.23 of its potential returns per unit of risk. ASPEN TECHINC DL is currently generating about 0.19 per unit of risk. If you would invest 578.00 in Sunny Optical Technology on August 28, 2024 and sell it today you would earn a total of 124.00 from holding Sunny Optical Technology or generate 21.45% 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. ASPEN TECHINC DL
Performance |
| Timeline |
| Sunny Optical Technology |
| ASPEN TECHINC DL |
Sunny Optical and ASPEN TECHINC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sunny Optical and ASPEN TECHINC
The main advantage of trading using opposite Sunny Optical and ASPEN TECHINC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunny Optical position performs unexpectedly, ASPEN TECHINC 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 ASPEN TECHINC will offset losses from the drop in ASPEN TECHINC's long position.The idea behind Sunny Optical Technology and ASPEN TECHINC DL pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| ASPEN TECHINC vs. Superior Plus Corp | ASPEN TECHINC vs. NMI Holdings | ASPEN TECHINC vs. Origin Agritech | ASPEN TECHINC 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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