Correlation Between C Sun and Fittech

Can any of the company-specific risk be diversified away by investing in both C Sun and Fittech 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 Fittech 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 Fittech Co, you can compare the effects of market volatilities on C Sun and Fittech 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 Fittech. Check out your portfolio center. Please also check ongoing floating volatility patterns of C Sun and Fittech.

Diversification Opportunities for C Sun and Fittech

0.6

Correlation Coefficient

C Sun  Fittech

Poor diversification

The 3 months correlation between 2467 and Fittech is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding C Sun Manufacturing and Fittech Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fittech 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 Fittech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fittech has no effect on the direction of C Sun i.e., C Sun and Fittech go up and down completely randomly.

Pair Corralation between C Sun and Fittech

Assuming the 90 days trading horizon C Sun Manufacturing is expected to generate 0.84 times more return on investment than Fittech. However, C Sun Manufacturing is 1.18 times less risky than Fittech. It trades about -0.09 of its potential returns per unit of risk. Fittech Co is currently generating about -0.17 per unit of risk. If you would invest  23,850  in C Sun Manufacturing on October 8, 2024 and sell it today you would lose (4,100) from holding C Sun Manufacturing or give up 17.19% of portfolio value over 90 days.

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

C Sun Manufacturing  vs.  Fittech 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 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.

Fittech

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fittech 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 C Sun and Fittech

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

The idea behind C Sun Manufacturing and Fittech 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.