Correlation Between BigBearai Holdings and Sun Hung

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

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

Diversification Opportunities for BigBearai Holdings and Sun Hung

-0.6

Correlation Coefficient

BigBearai Holdings  Sun Hung

Excellent diversification

The 3 months correlation between BigBearai and Sun is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding BigBearai Holdings and Sun Hung Kai in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sun Hung Kai and BigBearai Holdings 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 BigBearai Holdings are associated (or correlated) with Sun Hung. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sun Hung Kai has no effect on the direction of BigBearai Holdings i.e., BigBearai Holdings and Sun Hung go up and down completely randomly.

Pair Corralation between BigBearai Holdings and Sun Hung

Given the investment horizon of 90 days BigBearai Holdings is expected to generate 4.77 times more return on investment than Sun Hung. However, BigBearai Holdings is 4.77 times more volatile than Sun Hung Kai. It trades about 0.06 of its potential returns per unit of risk. Sun Hung Kai is currently generating about 0.0 per unit of risk. If you would invest  189.00  in BigBearai Holdings on September 21, 2024 and sell it today you would earn a total of  93.00  from holding BigBearai Holdings or generate 49.21% return on investment over 90 days.

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

BigBearai Holdings  vs.  Sun Hung Kai

BigBearai Holdings

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in BigBearai Holdings are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite fairly unsteady basic indicators, BigBearai Holdings demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Sun Hung Kai

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sun Hung Kai has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong forward-looking indicators, Sun Hung is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with BigBearai Holdings and Sun Hung

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

The idea behind BigBearai Holdings and Sun Hung Kai 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 Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.