Correlation Between Sui and SRN

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

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

Diversification Opportunities for Sui and SRN

0.77

Correlation Coefficient

Sui  SRN

Poor diversification

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

Pair Corralation between Sui and SRN

Assuming the 90 days trading horizon Sui is expected to under-perform the SRN. In addition to that, Sui is 2.51 times more volatile than SRN. It trades about -0.07 of its total potential returns per unit of risk. SRN is currently generating about -0.03 per unit of volatility. If you would invest  0.01  in SRN on December 28, 2024 and sell it today you would lose  0.00  from holding SRN or give up 7.14% of portfolio value over 90 days.

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

Sui  vs.  SRN

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.

SRN

Risk-Adjusted Performance

Very Weak

Over the last 90 days SRN has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, SRN 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 SRN

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

The idea behind Sui and SRN 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.