Correlation Between B Communications and Suny Cellular

Can any of the company-specific risk be diversified away by investing in both B Communications and Suny Cellular 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 B Communications and Suny Cellular into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between B Communications and Suny Cellular Communication, you can compare the effects of market volatilities on B Communications and Suny Cellular 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 B Communications with a short position of Suny Cellular. Check out your portfolio center. Please also check ongoing floating volatility patterns of B Communications and Suny Cellular.

Diversification Opportunities for B Communications and Suny Cellular

0.31

Correlation Coefficient

B Communications  Suny Cellular

Weak diversification

The 3 months correlation between BCOM and Suny is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding B Communications and Suny Cellular Communication in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Suny Cellular Commun and B Communications 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 B Communications are associated (or correlated) with Suny Cellular. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Suny Cellular Commun has no effect on the direction of B Communications i.e., B Communications and Suny Cellular go up and down completely randomly.

Pair Corralation between B Communications and Suny Cellular

Assuming the 90 days trading horizon B Communications is expected to generate 1.54 times more return on investment than Suny Cellular. However, B Communications is 1.54 times more volatile than Suny Cellular Communication. It trades about 0.11 of its potential returns per unit of risk. Suny Cellular Communication is currently generating about 0.09 per unit of risk. If you would invest  166,800  in B Communications on December 29, 2024 and sell it today you would earn a total of  24,400  from holding B Communications or generate 14.63% return on investment over 90 days.

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

B Communications  vs.  Suny Cellular Communication

B Communications

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in B Communications are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, B Communications sustained solid returns over the last few months and may actually be approaching a breakup point.

Suny Cellular Commun

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Suny Cellular Communication are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Suny Cellular may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with B Communications and Suny Cellular

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

The idea behind B Communications and Suny Cellular Communication 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.