Correlation Between Sun Pacific and Global Payout

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

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

Diversification Opportunities for Sun Pacific and Global Payout

0.46

Correlation Coefficient

Sun Pacific  Global Payout

Very weak diversification

The 3 months correlation between Sun and Global is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Sun Pacific Holding and Global Payout in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Payout and Sun Pacific 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 Sun Pacific Holding are associated (or correlated) with Global Payout. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Payout has no effect on the direction of Sun Pacific i.e., Sun Pacific and Global Payout go up and down completely randomly.

Pair Corralation between Sun Pacific and Global Payout

Given the investment horizon of 90 days Sun Pacific Holding is expected to under-perform the Global Payout. But the pink sheet apears to be less risky and, when comparing its historical volatility, Sun Pacific Holding is 6.58 times less risky than Global Payout. The pink sheet trades about -0.13 of its potential returns per unit of risk. The Global Payout is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  0.03  in Global Payout on December 24, 2024 and sell it today you would lose (0.01) from holding Global Payout or give up 33.33% of portfolio value over 90 days.

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

Sun Pacific Holding  vs.  Global Payout

Sun Pacific Holding

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sun Pacific Holding has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in April 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Global Payout

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Global Payout are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile basic indicators, Global Payout exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Sun Pacific and Global Payout

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

The idea behind Sun Pacific Holding and Global Payout 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.