Correlation Between Elong Power and Sunrise New

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

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

Diversification Opportunities for Elong Power and Sunrise New

0.83

Correlation Coefficient

Elong Power  Sunrise New

Very poor diversification

The 3 months correlation between Elong and Sunrise is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Elong Power Holding 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 Elong Power 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 Elong Power Holding 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 Elong Power i.e., Elong Power and Sunrise New go up and down completely randomly.

Pair Corralation between Elong Power and Sunrise New

Given the investment horizon of 90 days Elong Power Holding is expected to under-perform the Sunrise New. In addition to that, Elong Power is 1.37 times more volatile than Sunrise New Energy. It trades about -0.37 of its total potential returns per unit of risk. Sunrise New Energy is currently generating about -0.04 per unit of volatility. If you would invest  90.00  in Sunrise New Energy on September 16, 2024 and sell it today you would lose (17.00) from holding Sunrise New Energy or give up 18.89% of portfolio value over 90 days.

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

Elong Power Holding  vs.  Sunrise New Energy

Elong Power Holding

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Elong Power Holding 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 basic indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Sunrise New Energy

Risk-Adjusted Performance

0 of 100

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 weak performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Elong Power and Sunrise New

The main advantage of trading using opposite Elong Power and Sunrise New positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elong Power 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 Elong Power Holding 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.