Correlation Between Sui and SENC

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

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

Diversification Opportunities for Sui and SENC

0.85

Correlation Coefficient

Sui  SENC

Very poor diversification

The 3 months correlation between Sui and SENC is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Sui and SENC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SENC 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 SENC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SENC has no effect on the direction of Sui i.e., Sui and SENC go up and down completely randomly.

Pair Corralation between Sui and SENC

Assuming the 90 days trading horizon Sui is expected to under-perform the SENC. But the crypto coin apears to be less risky and, when comparing its historical volatility, Sui is 2.33 times less risky than SENC. The crypto coin trades about -0.09 of its potential returns per unit of risk. The SENC is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  0.03  in SENC on December 28, 2024 and sell it today you would lose (0.01) from holding SENC or give up 43.82% of portfolio value over 90 days.

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

Sui  vs.  SENC

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.

SENC

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in SENC are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, SENC may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Sui and SENC

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

The idea behind Sui and SENC 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.