Correlation Between C Sun and G Shank

Can any of the company-specific risk be diversified away by investing in both C Sun and G Shank 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 C Sun and G Shank into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between C Sun Manufacturing and G Shank Enterprise Co, you can compare the effects of market volatilities on C Sun and G Shank 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 C Sun with a short position of G Shank. Check out your portfolio center. Please also check ongoing floating volatility patterns of C Sun and G Shank.

Diversification Opportunities for C Sun and G Shank

0.37

Correlation Coefficient

C Sun  G Shank

Weak diversification

The 3 months correlation between 2467 and 2476 is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding C Sun Manufacturing and G Shank Enterprise Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on G Shank Enterprise and C Sun 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 C Sun Manufacturing are associated (or correlated) with G Shank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of G Shank Enterprise has no effect on the direction of C Sun i.e., C Sun and G Shank go up and down completely randomly.

Pair Corralation between C Sun and G Shank

Assuming the 90 days trading horizon C Sun Manufacturing is expected to generate 1.29 times more return on investment than G Shank. However, C Sun is 1.29 times more volatile than G Shank Enterprise Co. It trades about 0.09 of its potential returns per unit of risk. G Shank Enterprise Co is currently generating about 0.07 per unit of risk. If you would invest  19,900  in C Sun Manufacturing on September 29, 2024 and sell it today you would earn a total of  900.00  from holding C Sun Manufacturing or generate 4.52% return on investment over 90 days.

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

C Sun Manufacturing  vs.  G Shank Enterprise Co

C Sun Manufacturing

Risk-Adjusted Performance

0 of 100

Very Weak

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

G Shank Enterprise

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days G Shank Enterprise Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, G Shank 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 C Sun and G Shank

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

The idea behind C Sun Manufacturing and G Shank Enterprise 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.