Correlation Between Universal Health and Sunny Optical
Can any of the company-specific risk be diversified away by investing in both Universal Health 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 Universal Health and Sunny Optical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Universal Health Realty and Sunny Optical Technology, you can compare the effects of market volatilities on Universal Health 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 Universal Health with a short position of Sunny Optical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Universal Health and Sunny Optical.
Diversification Opportunities for Universal Health and Sunny Optical
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Universal and Sunny is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Universal Health Realty 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 Universal Health 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 Universal Health Realty 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 Universal Health i.e., Universal Health and Sunny Optical go up and down completely randomly.
Pair Corralation between Universal Health and Sunny Optical
Assuming the 90 days horizon Universal Health is expected to generate 1.01 times less return on investment than Sunny Optical. But when comparing it to its historical volatility, Universal Health Realty is 2.53 times less risky than Sunny Optical. It trades about 0.19 of its potential returns per unit of risk. Sunny Optical Technology is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 802.00 in Sunny Optical Technology on November 1, 2024 and sell it today you would earn a total of 36.00 from holding Sunny Optical Technology or generate 4.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Universal Health Realty vs. Sunny Optical Technology
Performance |
| Timeline |
| Universal Health Realty |
| Sunny Optical Technology |
Universal Health and Sunny Optical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Universal Health and Sunny Optical
The main advantage of trading using opposite Universal Health and Sunny Optical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Universal Health 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.| Universal Health vs. DXC Technology Co | Universal Health vs. PATTIES FOODS | Universal Health vs. Cognizant Technology Solutions | Universal Health vs. CN MODERN DAIRY |
| Sunny Optical vs. Tyson Foods | Sunny Optical vs. CN DATANG C | Sunny Optical vs. Pure Storage | Sunny Optical vs. TERADATA |
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 Valuation module to check real value of public entities based on technical and fundamental data.
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