Correlation Between Tatton Asset and Sunny Optical
Can any of the company-specific risk be diversified away by investing in both Tatton Asset and Sunny Optical 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 Tatton Asset and Sunny Optical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tatton Asset Management and Sunny Optical Technology, you can compare the effects of market volatilities on Tatton Asset and Sunny Optical 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 Tatton Asset with a short position of Sunny Optical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tatton Asset and Sunny Optical.
Diversification Opportunities for Tatton Asset and Sunny Optical
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Tatton and Sunny is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Tatton Asset Management and Sunny Optical Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sunny Optical Technology and Tatton Asset 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 Tatton Asset Management are associated (or correlated) with Sunny Optical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sunny Optical Technology has no effect on the direction of Tatton Asset i.e., Tatton Asset and Sunny Optical go up and down completely randomly.
Pair Corralation between Tatton Asset and Sunny Optical
Assuming the 90 days trading horizon Tatton Asset Management is expected to generate 0.52 times more return on investment than Sunny Optical. However, Tatton Asset Management is 1.93 times less risky than Sunny Optical. It trades about 0.06 of its potential returns per unit of risk. Sunny Optical Technology is currently generating about -0.02 per unit of risk. If you would invest 41,333 in Tatton Asset Management on October 12, 2024 and sell it today you would earn a total of 27,067 from holding Tatton Asset Management or generate 65.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 90.36% |
| Values | Daily Returns |
Tatton Asset Management vs. Sunny Optical Technology
Performance |
| Timeline |
| Tatton Asset Management |
| Sunny Optical Technology |
Tatton Asset and Sunny Optical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tatton Asset and Sunny Optical
The main advantage of trading using opposite Tatton Asset and Sunny Optical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tatton Asset position performs unexpectedly, Sunny Optical 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 Sunny Optical will offset losses from the drop in Sunny Optical's long position.| Tatton Asset vs. Coeur Mining | Tatton Asset vs. Costco Wholesale Corp | Tatton Asset vs. Atalaya Mining | Tatton Asset vs. CleanTech Lithium plc |
| Sunny Optical vs. Tyson Foods Cl | Sunny Optical vs. Impax Environmental Markets | Sunny Optical vs. National Beverage Corp | Sunny Optical vs. Indutrade 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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