Correlation Between Sunmax Biotechnology and Gigastorage Corp

Can any of the company-specific risk be diversified away by investing in both Sunmax Biotechnology and Gigastorage Corp 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 Sunmax Biotechnology and Gigastorage Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Sunmax Biotechnology Co and Gigastorage Corp, you can compare the effects of market volatilities on Sunmax Biotechnology and Gigastorage Corp 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 Sunmax Biotechnology with a short position of Gigastorage Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunmax Biotechnology and Gigastorage Corp.

Diversification Opportunities for Sunmax Biotechnology and Gigastorage Corp

-0.02

Correlation Coefficient

Sunmax Biotechnology  Gigastorage Corp

Good diversification

The 3 months correlation between Sunmax and Gigastorage is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Sunmax Biotechnology Co and Gigastorage Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gigastorage Corp and Sunmax Biotechnology 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 Sunmax Biotechnology Co are associated (or correlated) with Gigastorage Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gigastorage Corp has no effect on the direction of Sunmax Biotechnology i.e., Sunmax Biotechnology and Gigastorage Corp go up and down completely randomly.

Pair Corralation between Sunmax Biotechnology and Gigastorage Corp

Assuming the 90 days trading horizon Sunmax Biotechnology Co is expected to generate 0.94 times more return on investment than Gigastorage Corp. However, Sunmax Biotechnology Co is 1.07 times less risky than Gigastorage Corp. It trades about 0.31 of its potential returns per unit of risk. Gigastorage Corp is currently generating about -0.05 per unit of risk. If you would invest  27,500  in Sunmax Biotechnology Co on December 26, 2024 and sell it today you would earn a total of  10,500  from holding Sunmax Biotechnology Co or generate 38.18% return on investment over 90 days.

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

Sunmax Biotechnology Co  vs.  Gigastorage Corp

Sunmax Biotechnology

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Sunmax Biotechnology Co are ranked lower than 24 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Sunmax Biotechnology showed solid returns over the last few months and may actually be approaching a breakup point.

Gigastorage Corp

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Sunmax Biotechnology and Gigastorage Corp

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

The idea behind Sunmax Biotechnology Co and Gigastorage Corp 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.