Correlation Between Chailease Holding and Sun Max

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

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

Diversification Opportunities for Chailease Holding and Sun Max

-0.21

Correlation Coefficient

Chailease Holding  Sun Max

Very good diversification

The 3 months correlation between Chailease and Sun is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Chailease Holding Co and Sun Max Tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sun Max Tech and Chailease Holding 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 Chailease Holding Co are associated (or correlated) with Sun Max. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sun Max Tech has no effect on the direction of Chailease Holding i.e., Chailease Holding and Sun Max go up and down completely randomly.

Pair Corralation between Chailease Holding and Sun Max

Assuming the 90 days trading horizon Chailease Holding Co is expected to under-perform the Sun Max. In addition to that, Chailease Holding is 1.01 times more volatile than Sun Max Tech. It trades about -0.2 of its total potential returns per unit of risk. Sun Max Tech is currently generating about -0.02 per unit of volatility. If you would invest  5,180  in Sun Max Tech on October 26, 2024 and sell it today you would lose (190.00) from holding Sun Max Tech or give up 3.67% of portfolio value over 90 days.

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

Chailease Holding Co  vs.  Sun Max Tech

Chailease Holding

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Chailease Holding 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.

Sun Max Tech

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sun Max Tech has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Sun Max 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 Chailease Holding and Sun Max

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

The idea behind Chailease Holding Co and Sun Max Tech 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.