Correlation Between VIA Labs and Sun Max

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

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

Diversification Opportunities for VIA Labs and Sun Max

-0.57

Correlation Coefficient

VIA Labs  Sun Max

Excellent diversification

The 3 months correlation between VIA and Sun is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding VIA Labs 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 VIA Labs 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 VIA Labs 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 VIA Labs i.e., VIA Labs and Sun Max go up and down completely randomly.

Pair Corralation between VIA Labs and Sun Max

Assuming the 90 days trading horizon VIA Labs is expected to under-perform the Sun Max. In addition to that, VIA Labs is 1.34 times more volatile than Sun Max Tech. It trades about -0.12 of its total potential returns per unit of risk. Sun Max Tech is currently generating about 0.13 per unit of volatility. If you would invest  4,910  in Sun Max Tech on September 5, 2024 and sell it today you would earn a total of  700.00  from holding Sun Max Tech or generate 14.26% return on investment over 90 days.

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

VIA Labs  vs.  Sun Max Tech

VIA Labs

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days VIA Labs 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 January 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

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Sun Max Tech are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Sun Max showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with VIA Labs and Sun Max

The main advantage of trading using opposite VIA Labs and Sun Max positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VIA Labs 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 VIA Labs 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.