Correlation Between China SXT and Sunshine Biopharma
Can any of the company-specific risk be diversified away by investing in both China SXT and Sunshine Biopharma 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 China SXT and Sunshine Biopharma into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between China SXT Pharmaceuticals and Sunshine Biopharma, you can compare the effects of market volatilities on China SXT and Sunshine Biopharma 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 China SXT with a short position of Sunshine Biopharma. Check out your portfolio center. Please also check ongoing floating volatility patterns of China SXT and Sunshine Biopharma.
Diversification Opportunities for China SXT and Sunshine Biopharma
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between China and Sunshine is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding China SXT Pharmaceuticals and Sunshine Biopharma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sunshine Biopharma and China SXT 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 China SXT Pharmaceuticals are associated (or correlated) with Sunshine Biopharma. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sunshine Biopharma has no effect on the direction of China SXT i.e., China SXT and Sunshine Biopharma go up and down completely randomly.
Pair Corralation between China SXT and Sunshine Biopharma
Given the investment horizon of 90 days China SXT Pharmaceuticals is expected to under-perform the Sunshine Biopharma. But the stock apears to be less risky and, when comparing its historical volatility, China SXT Pharmaceuticals is 1.49 times less risky than Sunshine Biopharma. The stock trades about -0.31 of its potential returns per unit of risk. The Sunshine Biopharma is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 282.00 in Sunshine Biopharma on September 1, 2024 and sell it today you would earn a total of 4.00 from holding Sunshine Biopharma or generate 1.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
China SXT Pharmaceuticals vs. Sunshine Biopharma
Performance |
| Timeline |
| China SXT Pharmaceuticals |
| Sunshine Biopharma |
China SXT and Sunshine Biopharma Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China SXT and Sunshine Biopharma
The main advantage of trading using opposite China SXT and Sunshine Biopharma positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China SXT position performs unexpectedly, Sunshine Biopharma 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 Sunshine Biopharma will offset losses from the drop in Sunshine Biopharma's long position.| China SXT vs. Akanda Corp | China SXT vs. Petros Pharmaceuticals | China SXT vs. GelStat Corp | China SXT vs. Shuttle Pharmaceuticals |
| Sunshine Biopharma vs. Tff Pharmaceuticals | Sunshine Biopharma vs. Eliem Therapeutics | Sunshine Biopharma vs. Inhibrx | Sunshine Biopharma vs. Enliven Therapeutics |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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