Correlation Between Sunlight Financial and Capital Financial

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

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

Diversification Opportunities for Sunlight Financial and Capital Financial

-0.11

Correlation Coefficient

Sunlight Financial  Capital Financial

Good diversification

The 3 months correlation between Sunlight and Capital is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Sunlight Financial Holdings and Capital Financial Gl in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capital Financial and Sunlight Financial 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 Sunlight Financial Holdings are associated (or correlated) with Capital Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capital Financial has no effect on the direction of Sunlight Financial i.e., Sunlight Financial and Capital Financial go up and down completely randomly.

Pair Corralation between Sunlight Financial and Capital Financial

If you would invest  0.01  in Capital Financial Gl on September 4, 2024 and sell it today you would earn a total of  0.00  from holding Capital Financial Gl or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	1.59%
Values	Daily Returns

Sunlight Financial Holdings  vs.  Capital Financial Gl

Sunlight Financial

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sunlight Financial Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Sunlight Financial is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Capital Financial

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Capital Financial Gl are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak technical and fundamental indicators, Capital Financial showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Sunlight Financial and Capital Financial

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

The idea behind Sunlight Financial Holdings and Capital Financial Gl 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.