Correlation Between Tyson Foods and Sunny Optical
Can any of the company-specific risk be diversified away by investing in both Tyson Foods 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 Tyson Foods and Sunny Optical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tyson Foods and Sunny Optical Technology, you can compare the effects of market volatilities on Tyson Foods 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 Tyson Foods with a short position of Sunny Optical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tyson Foods and Sunny Optical.
Diversification Opportunities for Tyson Foods and Sunny Optical
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between Tyson and Sunny is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Tyson Foods 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 Tyson Foods 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 Tyson Foods 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 Tyson Foods i.e., Tyson Foods and Sunny Optical go up and down completely randomly.
Pair Corralation between Tyson Foods and Sunny Optical
Assuming the 90 days trading horizon Tyson Foods is expected to generate 2.53 times less return on investment than Sunny Optical. But when comparing it to its historical volatility, Tyson Foods is 2.47 times less risky than Sunny Optical. It trades about 0.24 of its potential returns per unit of risk. Sunny Optical Technology is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 554.00 in Sunny Optical Technology on August 25, 2024 and sell it today you would earn a total of 131.00 from holding Sunny Optical Technology or generate 23.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tyson Foods vs. Sunny Optical Technology
Performance |
| Timeline |
| Tyson Foods |
| Sunny Optical Technology |
Tyson Foods and Sunny Optical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tyson Foods and Sunny Optical
The main advantage of trading using opposite Tyson Foods and Sunny Optical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tyson Foods 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.| Tyson Foods vs. Charoen Pokphand Foods | Tyson Foods vs. Superior Plus Corp | Tyson Foods vs. NMI Holdings | Tyson Foods vs. Origin Agritech |
| Sunny Optical vs. GOODYEAR T RUBBER | Sunny Optical vs. MACOM Technology Solutions | Sunny Optical vs. Martin Marietta Materials | Sunny Optical vs. Firan Technology Group |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
Other Complementary Tools
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets |