Correlation Between Sunrise New and Stardust Power

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Can any of the company-specific risk be diversified away by investing in both Sunrise New and Stardust Power 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 Stardust Power 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 Stardust Power, you can compare the effects of market volatilities on Sunrise New and Stardust Power 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 Stardust Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunrise New and Stardust Power.

Diversification Opportunities for Sunrise New and Stardust Power

0.66
  Correlation Coefficient

Poor diversification

The 3 months correlation between Sunrise and Stardust is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Sunrise New Energy and Stardust Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stardust Power 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 Stardust Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stardust Power has no effect on the direction of Sunrise New i.e., Sunrise New and Stardust Power go up and down completely randomly.

Pair Corralation between Sunrise New and Stardust Power

Given the investment horizon of 90 days Sunrise New Energy is expected to generate 0.48 times more return on investment than Stardust Power. However, Sunrise New Energy is 2.09 times less risky than Stardust Power. It trades about 0.04 of its potential returns per unit of risk. Stardust Power is currently generating about 0.0 per unit of risk. If you would invest  101.00  in Sunrise New Energy on September 2, 2024 and sell it today you would earn a total of  5.00  from holding Sunrise New Energy or generate 4.95% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy79.69%
ValuesDaily Returns

Sunrise New Energy  vs.  Stardust Power

 Performance 
       Timeline  
Sunrise New Energy 

Risk-Adjusted Performance

3 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Sunrise New Energy are ranked lower than 3 (%) 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.
Stardust Power 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Stardust Power has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Stardust Power is not utilizing all of its potentials. The recent stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Sunrise New and Stardust Power Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Sunrise New and Stardust Power

The main advantage of trading using opposite Sunrise New and Stardust Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunrise New position performs unexpectedly, Stardust Power 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 Stardust Power will offset losses from the drop in Stardust Power's long position.
The idea behind Sunrise New Energy and Stardust Power 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.
Check out your portfolio center.
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.

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