Correlation Between Glory Star and Sun Pacific

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

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

Diversification Opportunities for Glory Star and Sun Pacific

0.17

Correlation Coefficient

Glory Star  Sun Pacific

Average diversification

The 3 months correlation between Glory and Sun is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Glory Star New and Sun Pacific Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sun Pacific Holding and Glory Star 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 Glory Star New are associated (or correlated) with Sun Pacific. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sun Pacific Holding has no effect on the direction of Glory Star i.e., Glory Star and Sun Pacific go up and down completely randomly.

Pair Corralation between Glory Star and Sun Pacific

If you would invest  198.00  in Sun Pacific Holding on September 4, 2024 and sell it today you would earn a total of  3.00  from holding Sun Pacific Holding or generate 1.52% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	1.59%
Values	Daily Returns

Glory Star New  vs.  Sun Pacific Holding

Glory Star New

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Glory Star New has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable primary indicators, Glory Star is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Sun Pacific Holding

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Sun Pacific Holding are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Sun Pacific showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Glory Star and Sun Pacific

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

The idea behind Glory Star New and Sun Pacific Holding 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.