Correlation Between Quintain Steel and Sunny Friend
Can any of the company-specific risk be diversified away by investing in both Quintain Steel and Sunny Friend 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 Quintain Steel and Sunny Friend into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Quintain Steel Co and Sunny Friend Environmental, you can compare the effects of market volatilities on Quintain Steel and Sunny Friend 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 Quintain Steel with a short position of Sunny Friend. Check out your portfolio center. Please also check ongoing floating volatility patterns of Quintain Steel and Sunny Friend.
Diversification Opportunities for Quintain Steel and Sunny Friend
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Quintain and Sunny is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Quintain Steel Co and Sunny Friend Environmental in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sunny Friend Environ and Quintain Steel 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 Quintain Steel Co are associated (or correlated) with Sunny Friend. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sunny Friend Environ has no effect on the direction of Quintain Steel i.e., Quintain Steel and Sunny Friend go up and down completely randomly.
Pair Corralation between Quintain Steel and Sunny Friend
Assuming the 90 days trading horizon Quintain Steel Co is expected to under-perform the Sunny Friend. But the stock apears to be less risky and, when comparing its historical volatility, Quintain Steel Co is 1.08 times less risky than Sunny Friend. The stock trades about -0.13 of its potential returns per unit of risk. The Sunny Friend Environmental is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 9,890 in Sunny Friend Environmental on September 14, 2024 and sell it today you would lose (770.00) from holding Sunny Friend Environmental or give up 7.79% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Quintain Steel Co vs. Sunny Friend Environmental
Performance |
Timeline |
Quintain Steel |
Sunny Friend Environ |
Quintain Steel and Sunny Friend Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Quintain Steel and Sunny Friend
The main advantage of trading using opposite Quintain Steel and Sunny Friend positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Quintain Steel position performs unexpectedly, Sunny Friend 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 Friend will offset losses from the drop in Sunny Friend's long position.Quintain Steel vs. Tainan Spinning Co | Quintain Steel vs. Lealea Enterprise Co | Quintain Steel vs. China Petrochemical Development | Quintain Steel vs. Ruentex Development Co |
Sunny Friend vs. Cleanaway Co | Sunny Friend vs. Topco Scientific Co | Sunny Friend vs. Chailease Holding Co |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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