Correlation Between Sunko Ink and Baolong International

Can any of the company-specific risk be diversified away by investing in both Sunko Ink and Baolong International 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 Sunko Ink and Baolong International into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Sunko Ink Co and Baolong International Co, you can compare the effects of market volatilities on Sunko Ink and Baolong International 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 Sunko Ink with a short position of Baolong International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunko Ink and Baolong International.

Diversification Opportunities for Sunko Ink and Baolong International

0.84

Correlation Coefficient

Sunko Ink  Baolong International

Very poor diversification

The 3 months correlation between Sunko and Baolong is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Sunko Ink Co and Baolong International Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Baolong International and Sunko Ink 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 Sunko Ink Co are associated (or correlated) with Baolong International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Baolong International has no effect on the direction of Sunko Ink i.e., Sunko Ink and Baolong International go up and down completely randomly.

Pair Corralation between Sunko Ink and Baolong International

Assuming the 90 days trading horizon Sunko Ink Co is expected to generate 3.24 times more return on investment than Baolong International. However, Sunko Ink is 3.24 times more volatile than Baolong International Co. It trades about 0.01 of its potential returns per unit of risk. Baolong International Co is currently generating about -0.09 per unit of risk. If you would invest  1,655  in Sunko Ink Co on October 3, 2024 and sell it today you would lose (55.00) from holding Sunko Ink Co or give up 3.32% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	98.82%
Values	Daily Returns

Sunko Ink Co  vs.  Baolong International Co

Sunko Ink

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sunko Ink Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in February 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Baolong International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Baolong International Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in February 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Sunko Ink and Baolong International

The main advantage of trading using opposite Sunko Ink and Baolong International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunko Ink position performs unexpectedly, Baolong International 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 Baolong International will offset losses from the drop in Baolong International's long position.

The idea behind Sunko Ink Co and Baolong International Co 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.