Correlation Between Sunonwealth Electric and Group Up

Can any of the company-specific risk be diversified away by investing in both Sunonwealth Electric and Group Up 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 Sunonwealth Electric and Group Up into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Sunonwealth Electric Machine and Group Up Industrial, you can compare the effects of market volatilities on Sunonwealth Electric and Group Up 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 Sunonwealth Electric with a short position of Group Up. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunonwealth Electric and Group Up.

Diversification Opportunities for Sunonwealth Electric and Group Up

-0.42

Correlation Coefficient

Sunonwealth Electric  Group Up

Very good diversification

The 3 months correlation between Sunonwealth and Group is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Sunonwealth Electric Machine and Group Up Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Group Up Industrial and Sunonwealth Electric 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 Sunonwealth Electric Machine are associated (or correlated) with Group Up. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Group Up Industrial has no effect on the direction of Sunonwealth Electric i.e., Sunonwealth Electric and Group Up go up and down completely randomly.

Pair Corralation between Sunonwealth Electric and Group Up

Assuming the 90 days trading horizon Sunonwealth Electric Machine is expected to generate 0.97 times more return on investment than Group Up. However, Sunonwealth Electric Machine is 1.03 times less risky than Group Up. It trades about 0.07 of its potential returns per unit of risk. Group Up Industrial is currently generating about -0.08 per unit of risk. If you would invest  9,250  in Sunonwealth Electric Machine on September 17, 2024 and sell it today you would earn a total of  950.00  from holding Sunonwealth Electric Machine or generate 10.27% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Sunonwealth Electric Machine  vs.  Group Up Industrial

Sunonwealth Electric

Risk-Adjusted Performance

5 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Sunonwealth Electric Machine are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Sunonwealth Electric may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Group Up Industrial

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Group Up Industrial 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 January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Sunonwealth Electric and Group Up

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

The idea behind Sunonwealth Electric Machine and Group Up Industrial 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.

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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.