Correlation Between ELITE MEAT and SUN

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

By analyzing existing cross correlation between ELITE MEAT PROCESSORS and SUN LIMITED, you can compare the effects of market volatilities on ELITE MEAT and SUN 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 ELITE MEAT with a short position of SUN. Check out your portfolio center. Please also check ongoing floating volatility patterns of ELITE MEAT and SUN.

Diversification Opportunities for ELITE MEAT and SUN

0.0

Correlation Coefficient

ELITE MEAT  SUN

Pay attention - limited upside

The 3 months correlation between ELITE and SUN is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding ELITE MEAT PROCESSORS and SUN LIMITED in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SUN LIMITED and ELITE MEAT 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 ELITE MEAT PROCESSORS are associated (or correlated) with SUN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SUN LIMITED has no effect on the direction of ELITE MEAT i.e., ELITE MEAT and SUN go up and down completely randomly.

Pair Corralation between ELITE MEAT and SUN

If you would invest  3,691  in SUN LIMITED on September 26, 2024 and sell it today you would earn a total of  329.00  from holding SUN LIMITED or generate 8.91% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	5.65%
Values	Daily Returns

ELITE MEAT PROCESSORS  vs.  SUN LIMITED

ELITE MEAT PROCESSORS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ELITE MEAT PROCESSORS has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, ELITE MEAT is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

SUN LIMITED

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SUN LIMITED has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's primary indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with ELITE MEAT and SUN

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

The idea behind ELITE MEAT PROCESSORS and SUN LIMITED 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.