Correlation Between Suny Cellular and Nextgen

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

By analyzing existing cross correlation between Suny Cellular Communication and Nextgen, you can compare the effects of market volatilities on Suny Cellular and Nextgen 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 Suny Cellular with a short position of Nextgen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Suny Cellular and Nextgen.

Diversification Opportunities for Suny Cellular and Nextgen

0.3

Correlation Coefficient

Suny Cellular  Nextgen

Weak diversification

The 3 months correlation between Suny and Nextgen is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Suny Cellular Communication and Nextgen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nextgen and Suny Cellular 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 Suny Cellular Communication are associated (or correlated) with Nextgen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nextgen has no effect on the direction of Suny Cellular i.e., Suny Cellular and Nextgen go up and down completely randomly.

Pair Corralation between Suny Cellular and Nextgen

Assuming the 90 days trading horizon Suny Cellular is expected to generate 1.77 times less return on investment than Nextgen. But when comparing it to its historical volatility, Suny Cellular Communication is 3.76 times less risky than Nextgen. It trades about 0.09 of its potential returns per unit of risk. Nextgen is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  6,000  in Nextgen on December 29, 2024 and sell it today you would earn a total of  180.00  from holding Nextgen or generate 3.0% return on investment over 90 days.

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

Suny Cellular Communication  vs.  Nextgen

Suny Cellular Commun

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Suny Cellular Communication are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Suny Cellular may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Nextgen

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Nextgen are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Nextgen sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Suny Cellular and Nextgen

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

The idea behind Suny Cellular Communication and Nextgen 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.