Correlation Between SUN and Sushi

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

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

Diversification Opportunities for SUN and Sushi

-0.17

Correlation Coefficient

SUN  Sushi

Good diversification

The 3 months correlation between SUN and Sushi is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding SUN and Sushi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sushi and SUN 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 are associated (or correlated) with Sushi. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sushi has no effect on the direction of SUN i.e., SUN and Sushi go up and down completely randomly.

Pair Corralation between SUN and Sushi

Assuming the 90 days trading horizon SUN is expected to under-perform the Sushi. But the crypto coin apears to be less risky and, when comparing its historical volatility, SUN is 1.17 times less risky than Sushi. The crypto coin trades about -0.01 of its potential returns per unit of risk. The Sushi is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest  60.00  in Sushi on September 3, 2024 and sell it today you would earn a total of  74.00  from holding Sushi or generate 123.33% return on investment over 90 days.

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

SUN  vs.  Sushi

SUN

Risk-Adjusted Performance

0 of 100

Very Weak

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

Sushi

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Sushi are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady fundamental indicators, Sushi exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with SUN and Sushi

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

The idea behind SUN and Sushi 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.

Check out your portfolio center.

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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.