Correlation Between Sui and COV

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

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

Diversification Opportunities for Sui and COV

0.77

Correlation Coefficient

Sui  COV

Poor diversification

The 3 months correlation between Sui and COV is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Sui and COV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COV and Sui 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 Sui are associated (or correlated) with COV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COV has no effect on the direction of Sui i.e., Sui and COV go up and down completely randomly.

Pair Corralation between Sui and COV

Assuming the 90 days trading horizon Sui is expected to under-perform the COV. In addition to that, Sui is 2.21 times more volatile than COV. It trades about -0.07 of its total potential returns per unit of risk. COV is currently generating about -0.02 per unit of volatility. If you would invest  35.00  in COV on December 28, 2024 and sell it today you would lose (2.00) from holding COV or give up 5.71% of portfolio value over 90 days.

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

Sui  vs.  COV

Sui

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sui has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Crypto's forward indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for Sui shareholders.

COV

Risk-Adjusted Performance

Very Weak

Over the last 90 days COV has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, COV is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Sui and COV

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

The idea behind Sui and COV 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.