Correlation Between International CSRC and Sunfar Computer

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

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

Diversification Opportunities for International CSRC and Sunfar Computer

0.75

Correlation Coefficient

International CSRC  Sunfar Computer

Poor diversification

The 3 months correlation between International and Sunfar is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding International CSRC Investment and Sunfar Computer Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sunfar Computer and International CSRC 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 International CSRC Investment are associated (or correlated) with Sunfar Computer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sunfar Computer has no effect on the direction of International CSRC i.e., International CSRC and Sunfar Computer go up and down completely randomly.

Pair Corralation between International CSRC and Sunfar Computer

Assuming the 90 days trading horizon International CSRC Investment is expected to under-perform the Sunfar Computer. In addition to that, International CSRC is 1.87 times more volatile than Sunfar Computer Co. It trades about -0.2 of its total potential returns per unit of risk. Sunfar Computer Co is currently generating about -0.08 per unit of volatility. If you would invest  1,620  in Sunfar Computer Co on October 20, 2024 and sell it today you would lose (65.00) from holding Sunfar Computer Co or give up 4.01% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

International CSRC Investment  vs.  Sunfar Computer Co

International CSRC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days International CSRC Investment 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.

Sunfar Computer

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sunfar Computer Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Sunfar Computer is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with International CSRC and Sunfar Computer

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

The idea behind International CSRC Investment and Sunfar Computer 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.