Correlation Between Eguana Technologies and Sunrise New

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

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

Diversification Opportunities for Eguana Technologies and Sunrise New

0.15

Correlation Coefficient

Eguana Technologies  Sunrise New

Average diversification

The 3 months correlation between Eguana and Sunrise is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Eguana Technologies 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 Eguana Technologies 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 Eguana Technologies 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 Eguana Technologies i.e., Eguana Technologies and Sunrise New go up and down completely randomly.

Pair Corralation between Eguana Technologies and Sunrise New

Assuming the 90 days horizon Eguana Technologies is expected to generate 4.56 times more return on investment than Sunrise New. However, Eguana Technologies is 4.56 times more volatile than Sunrise New Energy. It trades about 0.09 of its potential returns per unit of risk. Sunrise New Energy is currently generating about 0.07 per unit of risk. If you would invest  1.00  in Eguana Technologies on December 29, 2024 and sell it today you would lose (0.15) from holding Eguana Technologies or give up 15.0% of portfolio value over 90 days.

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

Eguana Technologies  vs.  Sunrise New Energy

Eguana Technologies

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Eguana Technologies are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Eguana Technologies reported solid returns over the last few months and may actually be approaching a breakup point.

Sunrise New Energy

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Sunrise New Energy are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Sunrise New showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Eguana Technologies and Sunrise New

The main advantage of trading using opposite Eguana Technologies and Sunrise New positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eguana Technologies 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 Eguana Technologies 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 Transaction History module to view history of all your transactions and understand their impact on performance.