Correlation Between SunCar Technology and WiMi Hologram

Can any of the company-specific risk be diversified away by investing in both SunCar Technology and WiMi Hologram 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 SunCar Technology and WiMi Hologram into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between SunCar Technology Group and WiMi Hologram Cloud, you can compare the effects of market volatilities on SunCar Technology and WiMi Hologram 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 SunCar Technology with a short position of WiMi Hologram. Check out your portfolio center. Please also check ongoing floating volatility patterns of SunCar Technology and WiMi Hologram.

Diversification Opportunities for SunCar Technology and WiMi Hologram

-0.29

Correlation Coefficient

SunCar Technology  WiMi Hologram

Very good diversification

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

Pair Corralation between SunCar Technology and WiMi Hologram

Assuming the 90 days horizon SunCar Technology Group is expected to generate 2.83 times more return on investment than WiMi Hologram. However, SunCar Technology is 2.83 times more volatile than WiMi Hologram Cloud. It trades about 0.25 of its potential returns per unit of risk. WiMi Hologram Cloud is currently generating about 0.17 per unit of risk. If you would invest  21.00  in SunCar Technology Group on September 12, 2024 and sell it today you would earn a total of  17.00  from holding SunCar Technology Group or generate 80.95% return on investment over 90 days.

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

SunCar Technology Group  vs.  WiMi Hologram Cloud

SunCar Technology

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in SunCar Technology Group are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unsteady basic indicators, SunCar Technology showed solid returns over the last few months and may actually be approaching a breakup point.

WiMi Hologram Cloud

Risk-Adjusted Performance

7 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in WiMi Hologram Cloud are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent primary indicators, WiMi Hologram demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SunCar Technology and WiMi Hologram

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

The idea behind SunCar Technology Group and WiMi Hologram Cloud 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.