Correlation Between Sunny Optical and HEXINDO ADIPERKASA

Can any of the company-specific risk be diversified away by investing in both Sunny Optical and HEXINDO ADIPERKASA 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 HEXINDO ADIPERKASA 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 HEXINDO ADIPERKASA, you can compare the effects of market volatilities on Sunny Optical and HEXINDO ADIPERKASA 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 HEXINDO ADIPERKASA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunny Optical and HEXINDO ADIPERKASA.

Diversification Opportunities for Sunny Optical and HEXINDO ADIPERKASA

-0.37

Correlation Coefficient

Sunny Optical  HEXINDO ADIPERKASA

Very good diversification

The 3 months correlation between Sunny and HEXINDO is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Sunny Optical Technology and HEXINDO ADIPERKASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HEXINDO ADIPERKASA 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 HEXINDO ADIPERKASA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HEXINDO ADIPERKASA has no effect on the direction of Sunny Optical i.e., Sunny Optical and HEXINDO ADIPERKASA go up and down completely randomly.

Pair Corralation between Sunny Optical and HEXINDO ADIPERKASA

Assuming the 90 days horizon Sunny Optical Technology is expected to generate 1.93 times more return on investment than HEXINDO ADIPERKASA. However, Sunny Optical is 1.93 times more volatile than HEXINDO ADIPERKASA. It trades about 0.15 of its potential returns per unit of risk. HEXINDO ADIPERKASA is currently generating about -0.1 per unit of risk. If you would invest  780.00  in Sunny Optical Technology on December 4, 2024 and sell it today you would earn a total of  274.00  from holding Sunny Optical Technology or generate 35.13% return on investment over 90 days.

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

Sunny Optical Technology  vs.  HEXINDO ADIPERKASA

Sunny Optical Technology

Risk-Adjusted Performance

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 fragile basic indicators, Sunny Optical reported solid returns over the last few months and may actually be approaching a breakup point.

HEXINDO ADIPERKASA

Risk-Adjusted Performance

Very Weak

Over the last 90 days HEXINDO ADIPERKASA has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Sunny Optical and HEXINDO ADIPERKASA

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

The idea behind Sunny Optical Technology and HEXINDO ADIPERKASA 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.