Correlation Between Cleanaway and Sunny Friend

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Cleanaway and Sunny Friend 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 Cleanaway and Sunny Friend into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cleanaway Co and Sunny Friend Environmental, you can compare the effects of market volatilities on Cleanaway and Sunny Friend 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 Cleanaway with a short position of Sunny Friend. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cleanaway and Sunny Friend.

Diversification Opportunities for Cleanaway and Sunny Friend

-0.09
  Correlation Coefficient

Good diversification

The 3 months correlation between Cleanaway and Sunny is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Cleanaway Co and Sunny Friend Environmental in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sunny Friend Environ and Cleanaway 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 Cleanaway Co are associated (or correlated) with Sunny Friend. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sunny Friend Environ has no effect on the direction of Cleanaway i.e., Cleanaway and Sunny Friend go up and down completely randomly.

Pair Corralation between Cleanaway and Sunny Friend

Assuming the 90 days trading horizon Cleanaway Co is expected to under-perform the Sunny Friend. But the stock apears to be less risky and, when comparing its historical volatility, Cleanaway Co is 2.48 times less risky than Sunny Friend. The stock trades about -0.06 of its potential returns per unit of risk. The Sunny Friend Environmental is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  8,990  in Sunny Friend Environmental on September 6, 2024 and sell it today you would earn a total of  150.00  from holding Sunny Friend Environmental or generate 1.67% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Cleanaway Co  vs.  Sunny Friend Environmental

 Performance 
       Timeline  
Cleanaway 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Cleanaway Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Cleanaway is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.
Sunny Friend Environ 

Risk-Adjusted Performance

1 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Sunny Friend Environmental are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Sunny Friend is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Cleanaway and Sunny Friend Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Cleanaway and Sunny Friend

The main advantage of trading using opposite Cleanaway and Sunny Friend positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cleanaway position performs unexpectedly, Sunny Friend 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 Sunny Friend will offset losses from the drop in Sunny Friend's long position.
The idea behind Cleanaway Co and Sunny Friend Environmental 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.
Check out your portfolio center.
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.

Other Complementary Tools

Volatility Analysis
Get historical volatility and risk analysis based on latest market data
Insider Screener
Find insiders across different sectors to evaluate their impact on performance
Fundamental Analysis
View fundamental data based on most recent published financial statements
Portfolio Manager
State of the art Portfolio Manager to monitor and improve performance of your invested capital
Equity Forecasting
Use basic forecasting models to generate price predictions and determine price momentum