Correlation Between Sun Max and Amulaire Thermal

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

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

Diversification Opportunities for Sun Max and Amulaire Thermal

0.72

Correlation Coefficient

Sun Max  Amulaire Thermal

Poor diversification

The 3 months correlation between Sun and Amulaire is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Sun Max Tech and Amulaire Thermal Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amulaire Thermal Tec and Sun Max 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 Sun Max Tech are associated (or correlated) with Amulaire Thermal. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amulaire Thermal Tec has no effect on the direction of Sun Max i.e., Sun Max and Amulaire Thermal go up and down completely randomly.

Pair Corralation between Sun Max and Amulaire Thermal

Assuming the 90 days trading horizon Sun Max Tech is expected to under-perform the Amulaire Thermal. But the stock apears to be less risky and, when comparing its historical volatility, Sun Max Tech is 1.18 times less risky than Amulaire Thermal. The stock trades about -0.02 of its potential returns per unit of risk. The Amulaire Thermal Technology is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  2,810  in Amulaire Thermal Technology on December 29, 2024 and sell it today you would earn a total of  270.00  from holding Amulaire Thermal Technology or generate 9.61% return on investment over 90 days.

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

Sun Max Tech  vs.  Amulaire Thermal Technology

Sun Max Tech

Risk-Adjusted Performance

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.

Amulaire Thermal Tec

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Amulaire Thermal Technology are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Amulaire Thermal may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Sun Max and Amulaire Thermal

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

The idea behind Sun Max Tech and Amulaire Thermal Technology 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.