Correlation Between Signify NV and Sunrise New

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

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

Diversification Opportunities for Signify NV and Sunrise New

0.02

Correlation Coefficient

Signify NV  Sunrise New

Significant diversification

The 3 months correlation between Signify and Sunrise is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Signify NV 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 Signify NV 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 Signify NV 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 Signify NV i.e., Signify NV and Sunrise New go up and down completely randomly.

Pair Corralation between Signify NV and Sunrise New

Assuming the 90 days horizon Signify NV is expected to generate 0.55 times more return on investment than Sunrise New. However, Signify NV is 1.83 times less risky than Sunrise New. It trades about -0.01 of its potential returns per unit of risk. Sunrise New Energy is currently generating about -0.12 per unit of risk. If you would invest  1,175  in Signify NV on August 31, 2024 and sell it today you would lose (25.00) from holding Signify NV or give up 2.13% of portfolio value over 90 days.

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

Signify NV  vs.  Sunrise New Energy

Signify NV

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Signify NV has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Signify NV is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the 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 December 2024. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with Signify NV and Sunrise New

The main advantage of trading using opposite Signify NV and Sunrise New positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Signify NV 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 Signify NV 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.