Correlation Between 3onedata and Great-Sun Foods

Can any of the company-specific risk be diversified away by investing in both 3onedata and Great-Sun Foods 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 3onedata and Great-Sun Foods into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between 3onedata Co Ltd and Great Sun Foods Co, you can compare the effects of market volatilities on 3onedata and Great-Sun Foods 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 3onedata with a short position of Great-Sun Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of 3onedata and Great-Sun Foods.

Diversification Opportunities for 3onedata and Great-Sun Foods

0.4

Correlation Coefficient

3onedata  Great-Sun Foods

Very weak diversification

The 3 months correlation between 3onedata and Great-Sun is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding 3onedata Co Ltd and Great Sun Foods Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Great Sun Foods and 3onedata 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 3onedata Co Ltd are associated (or correlated) with Great-Sun Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Great Sun Foods has no effect on the direction of 3onedata i.e., 3onedata and Great-Sun Foods go up and down completely randomly.

Pair Corralation between 3onedata and Great-Sun Foods

Assuming the 90 days trading horizon 3onedata Co Ltd is expected to generate 0.88 times more return on investment than Great-Sun Foods. However, 3onedata Co Ltd is 1.14 times less risky than Great-Sun Foods. It trades about 0.02 of its potential returns per unit of risk. Great Sun Foods Co is currently generating about 0.0 per unit of risk. If you would invest  2,338  in 3onedata Co Ltd on December 1, 2024 and sell it today you would earn a total of  13.00  from holding 3onedata Co Ltd or generate 0.56% return on investment over 90 days.

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

3onedata Co Ltd  vs.  Great Sun Foods Co

3onedata

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in 3onedata Co Ltd are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, 3onedata is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Great Sun Foods

Risk-Adjusted Performance

Very Weak

Over the last 90 days Great Sun Foods Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Great-Sun Foods is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with 3onedata and Great-Sun Foods

The main advantage of trading using opposite 3onedata and Great-Sun Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 3onedata position performs unexpectedly, Great-Sun Foods 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 Great-Sun Foods will offset losses from the drop in Great-Sun Foods' long position.

The idea behind 3onedata Co Ltd and Great Sun Foods 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..