Correlation Between Sunny Optical and Identiv

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

Diversification Opportunities for Sunny Optical and Identiv

-0.39

Correlation Coefficient

Sunny Optical  Identiv

Very good diversification

The 3 months correlation between Sunny and Identiv is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Sunny Optical Technology and Identiv in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Identiv 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 Identiv. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Identiv has no effect on the direction of Sunny Optical i.e., Sunny Optical and Identiv go up and down completely randomly.

Pair Corralation between Sunny Optical and Identiv

Assuming the 90 days horizon Sunny Optical Technology is expected to generate 1.02 times more return on investment than Identiv. However, Sunny Optical is 1.02 times more volatile than Identiv. It trades about 0.03 of its potential returns per unit of risk. Identiv is currently generating about -0.04 per unit of risk. If you would invest  857.00  in Sunny Optical Technology on December 29, 2024 and sell it today you would earn a total of  18.00  from holding Sunny Optical Technology or generate 2.1% 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.  Identiv

Sunny Optical Technology

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Sunny Optical Technology are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Sunny Optical may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Identiv

Risk-Adjusted Performance

Very Weak

Over the last 90 days Identiv has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Sunny Optical and Identiv

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

The idea behind Sunny Optical Technology and Identiv 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..