Correlation Between Sun Vending and GMM Grammy

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

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

Diversification Opportunities for Sun Vending and GMM Grammy

-0.2

Correlation Coefficient

Sun Vending  GMM Grammy

Good diversification

The 3 months correlation between Sun and GMM is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Sun Vending Technology and GMM Grammy Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GMM Grammy Public and Sun Vending 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 Vending Technology are associated (or correlated) with GMM Grammy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GMM Grammy Public has no effect on the direction of Sun Vending i.e., Sun Vending and GMM Grammy go up and down completely randomly.

Pair Corralation between Sun Vending and GMM Grammy

Assuming the 90 days trading horizon Sun Vending Technology is expected to under-perform the GMM Grammy. But the stock apears to be less risky and, when comparing its historical volatility, Sun Vending Technology is 1.15 times less risky than GMM Grammy. The stock trades about -0.02 of its potential returns per unit of risk. The GMM Grammy Public is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  575.00  in GMM Grammy Public on October 8, 2024 and sell it today you would earn a total of  260.00  from holding GMM Grammy Public or generate 45.22% return on investment over 90 days.

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

Sun Vending Technology  vs.  GMM Grammy Public

Sun Vending Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sun Vending Technology has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in February 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

GMM Grammy Public

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in GMM Grammy Public are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, GMM Grammy is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Sun Vending and GMM Grammy

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

The idea behind Sun Vending Technology and GMM Grammy Public 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.