Correlation Between Sunny Optical and Antofagasta Plc

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

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

Diversification Opportunities for Sunny Optical and Antofagasta Plc

-0.48

Correlation Coefficient

Sunny Optical  Antofagasta Plc

Very good diversification

The 3 months correlation between Sunny and Antofagasta is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Sunny Optical Technology and Antofagasta plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Antofagasta plc and Sunny Optical 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 Sunny Optical Technology are associated (or correlated) with Antofagasta Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Antofagasta plc has no effect on the direction of Sunny Optical i.e., Sunny Optical and Antofagasta Plc go up and down completely randomly.

Pair Corralation between Sunny Optical and Antofagasta Plc

Assuming the 90 days horizon Sunny Optical Technology is expected to generate 1.58 times more return on investment than Antofagasta Plc. However, Sunny Optical is 1.58 times more volatile than Antofagasta plc. It trades about 0.21 of its potential returns per unit of risk. Antofagasta plc is currently generating about -0.14 per unit of risk. If you would invest  657.00  in Sunny Optical Technology on October 9, 2024 and sell it today you would earn a total of  165.00  from holding Sunny Optical Technology or generate 25.11% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	97.37%
Values	Daily Returns

Sunny Optical Technology  vs.  Antofagasta plc

Sunny Optical Technology

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Sunny Optical Technology are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain basic indicators, Sunny Optical reported solid returns over the last few months and may actually be approaching a breakup point.

Antofagasta plc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Antofagasta plc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with Sunny Optical and Antofagasta Plc

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

The idea behind Sunny Optical Technology and Antofagasta plc 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .