Correlation Between AUSTEVOLL SEAFOOD and Sunny Optical
Can any of the company-specific risk be diversified away by investing in both AUSTEVOLL SEAFOOD 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 AUSTEVOLL SEAFOOD and Sunny Optical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AUSTEVOLL SEAFOOD and Sunny Optical Technology, you can compare the effects of market volatilities on AUSTEVOLL SEAFOOD 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 AUSTEVOLL SEAFOOD with a short position of Sunny Optical. Check out your portfolio center. Please also check ongoing floating volatility patterns of AUSTEVOLL SEAFOOD and Sunny Optical.
Diversification Opportunities for AUSTEVOLL SEAFOOD and Sunny Optical
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between AUSTEVOLL and Sunny is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding AUSTEVOLL SEAFOOD 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 AUSTEVOLL SEAFOOD 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 AUSTEVOLL SEAFOOD 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 AUSTEVOLL SEAFOOD i.e., AUSTEVOLL SEAFOOD and Sunny Optical go up and down completely randomly.
Pair Corralation between AUSTEVOLL SEAFOOD and Sunny Optical
Assuming the 90 days trading horizon AUSTEVOLL SEAFOOD is expected to generate 2.03 times less return on investment than Sunny Optical. But when comparing it to its historical volatility, AUSTEVOLL SEAFOOD is 2.56 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 0.09 of returns per unit of risk over similar time horizon. If you would invest 625.00 in Sunny Optical Technology on August 28, 2024 and sell it today you would earn a total of 77.00 from holding Sunny Optical Technology or generate 12.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AUSTEVOLL SEAFOOD vs. Sunny Optical Technology
Performance |
| Timeline |
| AUSTEVOLL SEAFOOD |
| Sunny Optical Technology |
AUSTEVOLL SEAFOOD and Sunny Optical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AUSTEVOLL SEAFOOD and Sunny Optical
The main advantage of trading using opposite AUSTEVOLL SEAFOOD and Sunny Optical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AUSTEVOLL SEAFOOD 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.| AUSTEVOLL SEAFOOD vs. TITAN MACHINERY | AUSTEVOLL SEAFOOD vs. ADRIATIC METALS LS 013355 | AUSTEVOLL SEAFOOD vs. GREENX METALS LTD | AUSTEVOLL SEAFOOD vs. Granite Construction |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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