Correlation Between Wizz Air and Sunny Optical
Can any of the company-specific risk be diversified away by investing in both Wizz Air 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 Wizz Air and Sunny Optical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Wizz Air Holdings and Sunny Optical Technology, you can compare the effects of market volatilities on Wizz Air 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 Wizz Air with a short position of Sunny Optical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Wizz Air and Sunny Optical.
Diversification Opportunities for Wizz Air and Sunny Optical
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Wizz and Sunny is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Wizz Air Holdings 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 Wizz Air 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 Wizz Air Holdings 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 Wizz Air i.e., Wizz Air and Sunny Optical go up and down completely randomly.
Pair Corralation between Wizz Air and Sunny Optical
Assuming the 90 days trading horizon Wizz Air Holdings is expected to generate 0.98 times more return on investment than Sunny Optical. However, Wizz Air Holdings is 1.02 times less risky than Sunny Optical. It trades about -0.11 of its potential returns per unit of risk. Sunny Optical Technology is currently generating about -0.2 per unit of risk. If you would invest 140,700 in Wizz Air Holdings on October 20, 2024 and sell it today you would lose (9,200) from holding Wizz Air Holdings or give up 6.54% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Wizz Air Holdings vs. Sunny Optical Technology
Performance |
| Timeline |
| Wizz Air Holdings |
| Sunny Optical Technology |
Wizz Air and Sunny Optical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Wizz Air and Sunny Optical
The main advantage of trading using opposite Wizz Air and Sunny Optical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wizz Air 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.| Wizz Air vs. Solstad Offshore ASA | Wizz Air vs. FinecoBank SpA | Wizz Air vs. SBM Offshore NV | Wizz Air vs. Dairy Farm International |
| Sunny Optical vs. National Beverage Corp | Sunny Optical vs. Qurate Retail Series | Sunny Optical vs. BE Semiconductor Industries | Sunny Optical vs. Nordic Semiconductor ASA |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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