Correlation Between Coor Service and Sunny Optical

Can any of the company-specific risk be diversified away by investing in both Coor Service 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 Coor Service and Sunny Optical into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Coor Service Management and Sunny Optical Technology, you can compare the effects of market volatilities on Coor Service 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 Coor Service with a short position of Sunny Optical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coor Service and Sunny Optical.

Diversification Opportunities for Coor Service and Sunny Optical

0.0

Correlation Coefficient

Coor Service  Sunny Optical

Pay attention - limited upside

The 3 months correlation between Coor and Sunny is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Coor Service 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 Coor Service 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 Coor Service 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 Coor Service i.e., Coor Service and Sunny Optical go up and down completely randomly.

Pair Corralation between Coor Service and Sunny Optical

Assuming the 90 days trading horizon Coor Service is expected to generate 1.7 times less return on investment than Sunny Optical. But when comparing it to its historical volatility, Coor Service Management is 1.37 times less risky than Sunny Optical. It trades about 0.02 of its potential returns per unit of risk. Sunny Optical Technology is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  7,020  in Sunny Optical Technology on December 30, 2024 and sell it today you would earn a total of  220.00  from holding Sunny Optical Technology or generate 3.13% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Coor Service Management  vs.  Sunny Optical Technology

Coor Service Management

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Coor Service Management are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Coor Service is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Sunny Optical Technology

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Sunny Optical Technology are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Sunny Optical may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Coor Service and Sunny Optical

The main advantage of trading using opposite Coor Service and Sunny Optical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coor Service 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.

The idea behind Coor Service Management and Sunny Optical Technology pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.