Correlation Between Sunrise New and ADS TEC

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

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

Diversification Opportunities for Sunrise New and ADS TEC

-0.29

Correlation Coefficient

Sunrise New  ADS TEC

Very good diversification

The 3 months correlation between Sunrise and ADS is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Sunrise New Energy and ADS TEC ENERGY PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ADS TEC ENERGY and Sunrise New 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 Sunrise New Energy are associated (or correlated) with ADS TEC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ADS TEC ENERGY has no effect on the direction of Sunrise New i.e., Sunrise New and ADS TEC go up and down completely randomly.

Pair Corralation between Sunrise New and ADS TEC

Given the investment horizon of 90 days Sunrise New Energy is expected to generate 0.78 times more return on investment than ADS TEC. However, Sunrise New Energy is 1.28 times less risky than ADS TEC. It trades about 0.07 of its potential returns per unit of risk. ADS TEC ENERGY PLC is currently generating about 0.02 per unit of risk. If you would invest  89.00  in Sunrise New Energy on December 28, 2024 and sell it today you would earn a total of  11.00  from holding Sunrise New Energy or generate 12.36% return on investment over 90 days.

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

Sunrise New Energy  vs.  ADS TEC ENERGY PLC

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.

ADS TEC ENERGY

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in ADS TEC ENERGY PLC are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable technical and fundamental indicators, ADS TEC is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Sunrise New and ADS TEC

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

The idea behind Sunrise New Energy and ADS TEC ENERGY PLC 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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.