Correlation Between AFC Energy and Sunrise New

Can any of the company-specific risk be diversified away by investing in both AFC Energy and Sunrise New 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 AFC Energy and Sunrise New into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between AFC Energy plc and Sunrise New Energy, you can compare the effects of market volatilities on AFC Energy and Sunrise New 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 AFC Energy with a short position of Sunrise New. Check out your portfolio center. Please also check ongoing floating volatility patterns of AFC Energy and Sunrise New.

Diversification Opportunities for AFC Energy and Sunrise New

0.07

Correlation Coefficient

AFC Energy  Sunrise New

Significant diversification

The 3 months correlation between AFC and Sunrise is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding AFC Energy plc and Sunrise New Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sunrise New Energy and AFC Energy 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 AFC Energy plc are associated (or correlated) with Sunrise New. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sunrise New Energy has no effect on the direction of AFC Energy i.e., AFC Energy and Sunrise New go up and down completely randomly.

Pair Corralation between AFC Energy and Sunrise New

Assuming the 90 days horizon AFC Energy plc is expected to under-perform the Sunrise New. In addition to that, AFC Energy is 1.32 times more volatile than Sunrise New Energy. It trades about -0.01 of its total potential returns per unit of risk. Sunrise New Energy is currently generating about -0.01 per unit of volatility. If you would invest  106.00  in Sunrise New Energy on November 29, 2024 and sell it today you would lose (10.00) from holding Sunrise New Energy or give up 9.43% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	98.33%
Values	Daily Returns

AFC Energy plc  vs.  Sunrise New Energy

AFC Energy plc

Risk-Adjusted Performance

Very Weak

Over the last 90 days AFC Energy plc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, AFC Energy is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Sunrise New Energy

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sunrise New Energy has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Sunrise New 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 AFC Energy and Sunrise New

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

The idea behind AFC Energy plc and Sunrise New Energy 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 Global Correlations module to find global opportunities by holding instruments from different markets.